I’m in the UK but I’m sure the logic around much of the world is the same. It seems like an incredibly bureaucratic waste of money to tax public sector wages, rather than just pay the workers upfront what they would get post-tax. I might be missing something though, so hope someone on here might enlighten me if I am!
In: Economics
1) It makes taxation simpler. People receive an income and pay taxes on that income. It doesn’t matter where it came from.
2) People often have multiple sources of income, these sources of income will change the tax burden in ways that are not proportional. In order to understand that, you need to understand progressive income tax rates. But imagine this:
Someone makes 50K tax free by working for the government. They also make 30K (taxed) by freelancing. How much tax do they owe? It get complicated.
3) Public service jobs are directly competing against the private sector for people. How does a person assess the value of multiple offers when they are calculated differently.
The further down the rabbit hole you go, the more issues you find.
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