Scofflaws and Unpaid Taxes
We are reading and hearing a lot these days about pension plans, particularly public employee plans. We all know that the local, state and the national governments have problems with their old fashioned defined benefit pension plans and retire health care plans.
Some are far more serious than others, and some governments have made serious changes to the structure of their plans. Others have made minor changes, or just kicked the can down the road, hoping on a wing and a prayer for a turnaround in the economy.
Well, when I open up The Washington Post the other day and read the article “Federal Employees Owe $1.03 Billion in Unpaid Taxes,” I about fell out of my chair. That’s right you read it correctly: 98,000 federal postal and congressional employees owed $1.03 billion in unpaid taxes at the end of fiscal 2010.
Now, you said where did this information come from? It came from none other than our very own Internal Revenue Service. It is hard to fathom – particularly considering economic situation we are in – that this could be true. If we cannot collect the taxes owed from the people who work for the government, then we are in far bigger trouble then I ever thought.
Republicans have introduced legislation which would allow federal agencies to fire tax delinquent employees. About $10.6 million in unpaid taxes in 2010 is owed by congressional staffers.
If that did not shock you maybe this will. We have all heard that the U.S. Postal Service (USPS) is having major fiscal problems; and we have heard about how it wants to raise postal rates while at the same time reducing service.
Well, at the postal service, 25,640 employees or 4 percent of the 667,000 strong workforce owe $269.6 million in unpaid income taxes to the federal government. If it makes you feel any better, this is a reduction from 2009, which is likely due in part to staff reductions. Even the Executive Office of the President has its problems, with 36 staffers owing $833,970 in back taxes.
Now, to be fair, overall American taxpayers owed $114.2 billion in unpaid taxes, interest and penalties at the end of fiscal 2010, according to the IRS. To me it is still very odd and troublesome that we could not easily collect this money since the government is the one paying these individuals.
We often hear stories about how the IRS is jumping all over a citizens or business owner. I have yet to hear a story about them jumping all over a government employee to collect owed taxes. If it was you or me, we would probably have had a lien placed on us in court, and our wages garnished – or maybe we’d be in the hooscow. But those feeding at the government trough apparently have little to fear from federal enforcers, who – for some reason – don’t seem inclined to go after their own.
As a government we have so many places that we could find to reduce spending, and we obviously have places where we could find revenue. But this will take politicians and bureaucrats who are willing to make tough decisions.
The first decision should be an easy one: if you work for the government your taxes should be paid in full or out you go! Get these people on some type of payment plan immediately and withhold the money since we are the ones paying them.
Remember the American taxpayer is the one who is funding their retirement and paying for their healthcare plan, so they are currently getting far more than the average American.