Paying Taxes to Your Boss: Another Step Toward 21st Century Feudalism

[salvorhardin]

I had no idea this shit was going on. I suppose we can be thankful they haven't given companies the right to pay in company script redeemable only at the company store -- yet. Boliding mine.

Though a lot of Americans really (really, really) hate paying taxes, most of us can at least justify it as our contribution to some greater good, whether it’s the broad range of social programs favored by progressives or a libertarian night watchman state. But what if the government instead told us, “We don’t want your money, but we would like to make friends with some rich guys, so just give it to them and let them have fun with it”? That could soon be the law of the land in Pennsylvania, where the state legislature has passed a bill that would, as Philadelphia City Paper blogger Daniel Denvir describes it, “allow companies that hire at least 250 new workers in the state to keep 95-percent of the workers' withheld income tax.” These workers will essentially be paying their employers for the privilege of having a job. Some have called this “corporate socialism,” but it also calls to mind an even older economic model that was once popular in Europe – except back then, the bosses were called lords. It’s a more modern innovation in the U.S., but combined with increased political pressure from employers and a crackdown on workers’ rights, it all adds up to feudalism, American-style.

The Pennsylvania bill is just the most recent example of state income taxes being turned into employer subsidies. It’s already the law of the land in one form or another in 19 states, and according to Good Jobs First, it’s taking $684 million a year out of the public coffers. The theory is that this will boost job creation. But the authors of the Good Jobs First report note, “payments often go to firms that simply move existing jobs from one state to another, or to ones that threaten to move unless they get paid to stay put.” In other words, it’s more like extortion than stimulus. With state governments facing a projected $4 trillion budget shortfall and continuing to cut social services and public sector jobs, they can hardly afford to be wasting money on companies that already have plenty and have no intention of putting it to good use. And the more governments turn over their privileges to businesses, the more the distinction between the two becomes blurred.

But if corporations have state governments over a barrel, they have their employees stuffed inside the barrel and ready to plunge down the waterfall. As I’ve noted before, some conservatives view all taxation as theft, but there’s surely no better term for what happens when employers promise their workers a certain wage or salary and then pocket some of the money for themselves. When you pay taxes to the government, you get something in return, whether it’s a school for your kids or a road to drive on or a firefighter to rescue you from a burning building. When you pay taxes to your boss, you… well, you give your boss your money. Your only reward is that you get to continue to “work the land,” so to speak. The lords didn’t consult with the peasants on which tapestries they should buy with the money they collected from them.

Did I forget to mention that these employers aren’t even required to tell their workers that this is how their “income taxes” are being used? Journalist David Cay Johnston, who covers this issue in his new book, The Fine Print: How Big Companies Use ‘Plain English’ to Rob You Blind, writes that this bait-and-switch is “stealthy by design.” Of course it is; if these workers were important enough to know where their money is going, it wouldn’t be legal to steal it.
Full post: http://www.nextnewdeal.net/paying-taxes-your-boss-another-step-toward-21st-century-feudalism

[jenw2]

1. We already give money to our bosses

They're taken-out of our paychecks already. We should be able to pay our own taxes directly like free people.

[panAmerican]

2. This also exists in another form

In certain economic zones, a retailer is allowed to withhold a portion of the sales taxes because they are collecting them on behalf of of the State.

[HeiressofBickworth]

3. This idea sucks on so many levels

I don't understand how this would work. Ok, your withholding goes to the employer who can keep 95% of it. What happens then when you file your income tax? You are required to pay a certain amount, it was taken out of your wages, but it doesn't appear in your account with the IRS. Will the IRS come looking for the rest of their money? Taxes you have already paid but didn't go to the IRS?

Here's something that can happen: back in the 70's I worked for a sole-practitioner (lawyer). He had all kinds of money problems. I actually had 8 paychecks bounce. When the bank called to say a check bounced, my employer would rush to his bank, make some money transfers so my paycheck would clear. All appropriate taxes were deducted from my wages. The day came when he couldn't cover my paycheck. I packed up my desk and walked out on him. The very next day, I went to the unemployment office and told them my story. In Washington, you can't collect unemployment if you have quit, however, in my case, I wasn't paid and it was deemed a constructive dismissal. One little catch. The bastard had NEVER paid my unemployment insurance taxes, there was no money in unemployment insurance for me. I was a single mother with a 5 year old kid and nearly nothing in savings. Fortunately, I was able to find a job in a couple of weeks, but it was a very difficult time.

It's so easy for these legislators to juggle around YOUR money. No consideration given to consequences. Their actions don't affect THEM so why should they care.

[salvorhardin]

4. And what if you overpay your withholding?

95% of what you overpay goes directly to the employer. Presumably you get a refund from the state tax bureau for the amount of the overage, but do they then bill your employer for 95% of how much they have to refund to you? In other words, via withholding you overpay $100. The employer keeps $95 of that, but the state has to refund you $100. So will they also bill the employer for the other $95, or will the state just write it off? The whole setup just lends itself to funny accounting.