Another Reason Why Any American, Rich Or Poor, Should Not Pay Another Penny In Federal Taxes

Let's review the numbers that we all should know by memory now (and which we have documented from reliable, nonpartisan sources in previous posts):

• Annual waste and fraud lost by Medicare: $60 - $90 billion
• Annual waste and fraud lost by Medicaid: $30 - $40 billion
• Annual waste and fraud lost by Social Security: $70 billion
• Annual waste and fraud lost by just one Federal unemployment program: $19 billion
• Annual waste and fraud lost by the Federal food stamp program: $2 - $5 billion
• Annual Federal income tax evaded by tax evaders: $325 billion
• Total waste by just the above Federal programs: $506 - $549 billion
• Total annual wasteful spending per American household: $4,400 - $4,800

Now, keeping these figures in mind, consider the findings of a study by James Sherk is Senior Policy Analyst in Labor Economics in the Center for Data Analysis at the Heritage Foundation. His study examined the pay levels, and pay differences, between similar job positions in the Federal government and the private sector. This study is consistent with similar studies that we have already discussed in this blog but Mr. Sherk appears to have done a very comprehensive job of analyzing the data and adjusting the results to make sure job comparisons are fair and accurate.

His findings include the following:

• The Federal pay system gives the average Federal employee wages 22% above the average private worker’s for doing the same type of work when the data are adjusted for time in position and education.
• If you include benefits, the average compensation disparity between a Federal worker and their comparable private sector counterpart rises to between 30% and 40%.
• Federal workers receive automatic seniority-based raises irrespective of performance whereas most private sector employees only get a raise for good or outstanding performance, assuming that their company actually has the wherewithal to give raises in these tough economic times.
• President Obama’s suspension of the annual cost-of-living adjustment does not affect these raises, i.e. the President's claim that he froze Federal worker salaries is not valid or correct.
• Federal employees receive more enhanced health benefits, for retirement they receive both a defined-benefit and defined-contribution pension plan (whereas very few private sector employees can still receive a defined contribution pension), and Federal employees get full retirement at 56 with full health benefits (while private sector employees retire at a much later age on average).
• Federal employees get significantly more paid leave than private-sector workers with a Federal employee with three years on the job receiving all 10 Federal holidays, 20 paid vacation days, and 13 sick leave days per year.
• Despite millions of jobs being lost in the private sector, resulting in an overall unemployment rate in the country of 8.6% and an underemployment rate of about 16%, the Federal government civilian payroll has expanded by over 230,000 employees over the past few years which is the equivalent of a 12% increase. Ask yourself if you are getting 12% better service from the Federal government over the past few years.
• Federal employees voluntarily leave their jobs at one third the rate that private employees leave their positions, indicating that Federal employees realize what a sweet deal they have.
• Federal guidelines make it almost impossible to fire a Federal employee regardless of their behavior and how poorly or well they perform their jobs.

According to my calculations, if you assume that the average Federal employees fully loaded costs to the taxpayer is say $80,000 (wages, benefits, retirement costs), then if the Federal government had just kept its employee level unchanged in these dire economic times, the American taxpayer would be saved about $18 billion a year. I doubt that the American taxpayer would notice any drop off in government service and accountability if the Federal payroll was returned to its 2008 level.

Furthermore, Mr. Sherk calculates that if the Federal payroll system was reduced to competitive market rates, America taxpayers would save another $47 billion a year. Thus, this situation is unnecessarily costing American taxpayers about $65 billion a year.

Three observations about fairness come to mind immediately:

1. Since Federal workers are totally dependent on private sector workers paying taxes, it seems a little unfair that Federal workers get much higher salaries, much better health care benefits, much better retirement options, and much better vacation time than the average private sector worker.
2. Since private sector employment has taken a beating during and after the Great Recession, it seems a little unfair that the Federal employment situation has been so rosy and robust.
3. Since the Federal government's excessive employee compensation unnecessarily costs the country $65 billion a year, it seems a little unfair for President Obama to ask any American to pay more in taxes in these tough economic times since even if we only used Mr. Sherk's $47 billion annual savings estimate, the President could more than fund his infrastructure jobs program (which does not mean it is a good idea) without raising taxes.

In the bigger picture, we have just added another 65 billion reasons why no American should pay a penny more in taxes. Our Federal government wastes so much money and wealth in so many ways that we can now confidently say that we its inefficiency from all sources now costs us at least $571 to $614 billion a year.

This comes out to about $5,000 to $5,300 a year per U.S. household. Imagine how much better off our economy would be if over 100,000,000 U.S. households had an extra $5,000 or so to spend every year. I would bet that the Federal government would be more efficient, unemployment and underemployment rates would drop sharply and no America would pay anything more in taxes, leaving all of us a much freer democracy in the process.



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http://www.repealamendment/