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Tuesday, June 21, 2016

Government employees don't pay taxes.... REALLY!

I want you to consider a hypothetical nation of 4 people.  In this pretend country all 4 of them make $1000 per week in pay.   1 person (let's call him citizen A) works for the government and the other 3 (B,C,D) work in the private sector.   All 4 pay 25% in taxes.

So let's see how this works.   All 4 would pay $250 in taxes each each.  To make it easier to visualize, let's say they all get 2 checks each pay check.  1 check for $750 for their take-home pay and $250 check to pay their taxes.

Each week B, C & D get 2 paychecks but all of their tax-checks are directly cashed and paid to the government to cover NEXT weeks expenses (A's salary).  That's 250+250+250 = $750.    "A" however gets 2 paychecks also, with $250 assigned to the government and $750 from the money gathered the previous week from B,C & D.    One interesting difference however is "A"s $250 check never needs to be cashed as it will just be handed to him again the NEXT week.  So week after week "A" gets the same $250 check each week and a NEW $750 check from the money collected from B,C & D's taxes the previous week (why cash it when you just have to write another one to him the next week).  Since "A"s tax-check is never really cashed, you can arguably say that "A" doesn't really pay any taxes at all.

I know this is a simple case, but it illustrates the fact that government employees really don't contribute money to the government operation at all since their pay is derived from the government and their taxes collected simply get rolled over from the previous week into the current weeks pay, like a check that never gets cashed and is just re-used from week to week.

Only the 3 private sectors actually contribute to the government.

BONUS QUESTION:
    Should it therefore be required that government employees NOT be allowed to VOTE since they don't really contribute to the government financially?

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