Do public sector employees contribute to tax revenue?

[Wilber]

That just shows how crime hurts the economy. Instead of the money being spent on infrastructure (which helps your argument) or in potential tax breaks, that money is spent on processing a bozo.

What if that bozo is you? Point is, unless you are self employed, your employer pays your income taxes regardless of who you work for. If you are self employed, your customers are paying your taxes.

Edited April 3, 2011 by Wilber

[Bryan]

They ignore labour because it crushes their argument.

It doesn't crush the argument, it's a completely irrelevant red herring.

[Pliny]

I think that perception is part of the problem in understanding this point.

The question is not whether government "work" or public employee "work" has value. Obviously, the work of government is to provide an environment where work can be accomplished and the value enjoyed in a standard of living. In that sense it has value. However, government, since it makes no profit, is economically parasitic. Socially it is supposed to be symbiotic.

The original question is whether public employees contribute to tax revenue and not whether they contribute to the economy. Since they are paid out of government revenues, be it from taxes, tariffs, fines, fees or "investments"(probably public private partnerships. I notice government shifting to the word "investment" rather than calling it "spending"), and not out of "profits" it is a rather redundant exercise to take back some of the money they are paid in the form of payroll taxes. A business doing that would be termed idiotic and pounced upon by union-types in no time. Perception is everything though and public employees paying taxes appears only fair.

[Oleg Bach]

Most public sector employes do not contribute to the tax base...They suck up more in public money than they put back. To pay them cost a fortune...what they pay in taxes does not even come close to their contribution. If they did contribute that would mean that they get taxed more than they are paid...which is impossible.

[Bonam]

You know, thinking about this some more, I think every cent of money that a worker (public or private) is paid eventually comes back to the government.

Example: I get paid $1000. $200 of it is taken away as income tax. I'm left with $800. I go and buy something that costs $800 after sales tax. The guy I bought it from gets $714.28 and the government gets $85.72. The guy who got the $714.28 goes and buys something else that costs that amount after tax. Well, whoever he bought it from gets $637.75 and the government gets $76.53.

This keeps happening each time the money changes hands and a sales tax is applied. After the money has changed hands 10 times, the government has received 68% of the original amount due to its 12% sales tax. After it's changed hands 20 times, it's gotten back 90%. After 50 times, it's taxed away 99.7% of the original amount. And money changes hands constantly, it probably doesn't even take a year on average for those 50 times to happen.

The only exception to this is if people go spend their money in other countries and are taxed there instead. But so long as someone remains in the country and spends their money here, every last cent of it eventually goes back to the government.

In theory, this would mean that a public sector worker doesn't actually cost the government anything, since they eventually get back every penny they paid them as taxes. The money the government pays out is effectively an interest free loan, rather than a salary, since by the nature of taxation it all eventually comes back to the government.

Edited April 3, 2011 by Bonam

[Oleg Bach]

Yesterday my daughter dropped by with a bag of dog food for her mutts - and a crisp fifty for old pops....it did not last long - It got taxed out of existance in less than 12 hours....why is it that a pack of 3 dollar smokes costs ten bucks? Why do most merchants go out of buisness? Probably because they are over worked and under paid tax collectors...I guess it might be good to go pro in the tax collecting buisness and get a federal job.

[Pliny]

You know, thinking about this some more, I think every cent of money that a worker (public or private) is paid eventually comes back to the government.

Example: I get paid $1000. $200 of it is taken away as income tax. I'm left with $800. I go and buy something that costs $800 after sales tax. The guy I bought it from gets $714.28 and the government gets $85.72. The guy who got the $714.28 goes and buys something else that costs that amount after tax. Well, whoever he bought it from gets $637.75 and the government gets $76.53.

This keeps happening each time the money changes hands and a sales tax is applied. After the money has changed hands 10 times, the government has received 68% of the original amount due to its 12% sales tax. After it's changed hands 20 times, it's gotten back 90%. After 50 times, it's taxed away 99.7% of the original amount. And money changes hands constantly, it probably doesn't even take a year on average for those 50 times to happen.

The only exception to this is if people go spend their money in other countries and are taxed there instead. But so long as someone remains in the country and spends their money here, every last cent of it eventually goes back to the government.

In theory, this would mean that a public sector worker doesn't actually cost the government anything, since they eventually get back every penny they paid them as taxes. The money the government pays out is effectively an interest free loan, rather than a salary, since by the nature of taxation it all eventually comes back to the government.

The money issued is indeed a debt and fully expected to be recovered by the lender. It's their money.

If they didn't create it then it wouldn't be their money.

[Shwa]

It doesn't crush the argument, it's a completely irrelevant red herring.

It crushes your argument right out of the box. In fact, I believe that your argument was crushed before it even got out of the box because you don't understand government revenue streams properly enough to form a coherent opinion.

Of the labour - or work - is an irrelevant red herring that what do you think is being taxed on the public employee's paycheque?

[Shwa]

...it is a rather redundant exercise to take back some of the money they are paid in the form of payroll taxes. A business doing that would be termed idiotic and pounced upon by union-types in no time.

Do businesses not pay their employees out of the funds they receive from their clients for goods and/or services they provide?

[bloodyminded]

Do businesses not pay their employees out of the funds they receive from their clients for goods and/or services they provide?

Evidently an unfortunate annoyance.