Public Sector Works and Income Tax

[elster]

The fact of the matter is technically they don't actually contribute anything from income tax.

Does anyone know why they pay income tax?

Surely a tax free wage would be better and pay them less, it saves on the admin costs surely.

[davepoth]

elster said:

The fact of the matter is technically they don't actually contribute anything from income tax.

Does anyone know why they pay income tax?

Surely a tax free wage would be better and pay them less, it saves on the admin costs surely.

It certainly would, as would removing the idea that they actually had a pension fund. But there are so many different tax codes that it would be difficult to make it fair.

On that train of thought, flat tax is a much more fun idea though.

[Frankeh]

elster said:

The fact of the matter is technically they don't actually contribute anything from income tax.

Does anyone know why they pay income tax?

Surely a tax free wage would be better and pay them less, it saves on the admin costs surely.

Economies of scale.
I imagine that creating a separate exception/process for them would probably be more costly than just making them pay income tax.

[Chrisw666]

I can see the press having a field day with that one.

The jealousy from those that don't understand would be overwhelming.

[BoRED S2upid]

I like the theory just pay them all 20 odd % less and they pay no tax. Im sure governments would hate it though its easy for them to solve unemployment by creative lots of new public sector jobs and in the meantime increasing the tax income. Didn't labour do this for decades?

[TPA]

And part of the new taxless deal would be a no strike deal, 25% reduction in gross salary, no income tax and no strike deal.

[Guybrush]

I've thought that for years. There's really no point in all the red tape for the Revenue and Customs (and yet more pointless jobs) (and payroll systems) managing the tax and NI deductions of public sector workers, when all you are doing is giving them a salary ultimately funded by private sector and then taking some straight back in taxes and NI. What's the point? Just pay them a net amount. (I realise there is some means testing and thus non-standard tax codes, but there must be some simplification possible.