New government data showing that federal workers are cheating Uncle Sam out of greater amounts of income tax revenue while enjoying cushier benefits and pay than those in the private sector. The IRS report has reignited a long-standing controversy on Capitol Hill: Should federal workers who fail to pay their taxes be held to a higher standard under the law than private sector workers?
About 98,000 federal, Congressional, and postal employees owed the Internal Revenue Service $1.03 billion in unpaid taxes at the end of fiscal 2010, according to a recent IRS audit of federal workers.
Add federal retirees and military personnel to that roster, and the overall amount federal workers owe in back taxes swells to 3.4 billion.
That includes $833,970 in unpaid taxes from 36 White House aides—an irony that was not lost on dozens of mostly conservative Web sites who classified it as ludicrous that despite President Obama’s recent calls for every American to “pay their fair share” in taxes, members of his own inner circle weren’t obliging. The IRS audit also showed House and Senate staffers owed $10.6 million in back taxes, Health and Human Services staffers owed $41 million, and Environmental Protection Agency staffers owed $19 million.
Including wages and benefits, federal workers on average earn an average of 16 percent more in total compensation than their private sector counterparts, according to a separate Congressional Budget Office report out this week.
Clamping down on federal employee pay is attractive to many Republican lawmakers, who last winter proposed slashing federal workers salaries and benefits in order to fund an extension of the payroll tax cut — a levy 160 million Americans pay to fund the federal Social Security retirement program. Congress is again hard-pressed to come up with finances to extend the 2 percentage-point tax cut beyond the end of this month, when it's due to expire again.
“If you work for the federal government and you don't pay your taxes, you should be fired.”
“It is totally unacceptable to live on the federal payroll and not pay your taxes,” said Congressman Jason Chaffetz, R-Utah, in a statement. Chaffetz has long favored imposing harsher treatment on federal workers who owe taxes than their private sector counterparts. Under federal labor law, it is illegal for an employer to terminate an employee on the basis that their earnings are garnished for any one debt, including owing taxes, except in case of IRS employees who can be terminated for unpaid taxes. “If you work for the federal government and you don't pay your taxes, you should be fired,” Chaffetz said.