Congressman Jason Chaffetz (R-UT) introduced a bill to Congress requiring federal agencies to fire employees who are seriously delinquent in their tax obligations. A new report shows that at least 100,000 federal employees owe more than $1 billion to the federal government in back taxes. According to Chaffetz, most people pay their taxes on time regardless of their income, so federal employees should be required to do the same. He defines “seriously delinquent” as owing enough to for a lien to have been publicly filed.
This isn’t the first time Chaffetz has introduced this bill, nor is it anything new for him to be looking for ways to get rid of federal workers. Chaffetz has, in the past, called for bringing the size of the federal government by slowing down federal hiring, and bringing down their compensation so that it’s more in line with private sector jobs. His claim that total compensation for federal employees is roughly 16% higher than that of their private sector counterparts is true, yet he calls their compensation packages bloated, and implies that they are a major contributor to the federal deficit. One of his first ideas for shrinking the federal workforce was to get rid of all the employees who were delinquent in their tax obligations.
His bill does make exceptions for employees who are demonstrating financial hardship and making good-faith efforts to resolve their tax issues. Simply being delinquent on their taxes is not enough to get them fired.
This brings up a question, however, because while federal employees have a responsibility to pay their taxes, so does everyone else, and Chaffetz doesn’t seem to be targeting them with his legislation.
Chaffetz is one of the House Republicans that believes there’s common ground when it comes to finding and closing tax loopholes, but he voted against the fiscal cliff deal due to the $600 billion in new tax revenue. He wants to broaden the tax base and lower tax rates for all, and he’s one of the many House Republicans who believes in using increased revenue only to pay for lowering taxes overall.
Broadening the tax base, however, doesn’t work when thousands of people lose their jobs in a short period. Collecting those back taxes also becomes more difficult when people are unemployed, because, if nothing else, now they have a legitimate hardship claim. Not to mention the costs involved in having each agency root out their tax dodgers. The money saved by firing them isn’t likely to cover those ongoing costs, and as a Republican, Chaffetz is all about cutting government spending. Adding a new, onerous duty to each agency runs counter to that ideal.
This is also another way to punish individual, middle-class Americans, while companies receiving federal dollars for various things are also delinquent on their taxes. In 2011, the first time Chaffetz introduced this type of measure, he didn’t just target federal employees, he included anyone who received federal funding. If the measure had passed, organizations that were delinquent in their taxes would be ineligible to receive federal dollars until their taxes were current. These provisions don’t exist in the current bill.
Furthermore, despite the fact that the number of dollars owed by federal employees tops $1 billion, it’s mere droplets when compared to what corporations would owe without all their loopholes and tax breaks. Those, plus havens, give the U.S. the second-lowest effective corporate tax rate in the industrialized world, despite all the cries that our taxes are among the highest and make us less competitive. Companies like PepsiCo, DuPont, Pacific Gas & Electric, Mattel, Boeing, Wells Fargo, and more all paid zero in taxes from 2008-2010. In fact, the group of 30 major companies that these are a part of got refunds from the government due to loopholes and breaks, when they should have paid at least $55 billion combined.
This kind of selective targeting when it comes to tax liability is typical of Republicans; punish the little guy in every way possible, but allow the big players to get away with anything.