Hold on, what do you mean people who work for the government don’t pay taxes? I work for the government and I sure have taxes being taken from my check every two weeks.

Government employees don’t add to the economy either.

Hold on, I spend my pay every month, of course I’m adding to the economy.

Actually, you would be wrong. You don’t do either.

Let me demonstrate this by a simple exercise.

A person has two job offers. The pay is the same…let’s say $75K.

One offer is from the government, a job at the FAA. The other job is in the private sector for Southwest Airlines.

Let’s assume all the taxes you pay is the same…in this example 33%. Again, just a number, the percent does not matter. The taxes paid would be 25K, your take home pay is 50K, regardless of the job you take.

Now you would think there is no difference. But there is a big difference.

If the government hires you they are not getting a 25K credit. The are taking on a 50K debit…the true cost of hiring you. In other words the government is going in the hole 50K.

If Southwest hires you, the government is getting a 25K credit from the taxes you pay, they are gaining 25K in revenue.

That’s what I mean by government employees don’t pay taxes…as far as the government is concerned…they are taking a hit, they are in fact losing 50K in this scenario.

The private sector pays for all the things government does. It would probably be better if the government just paid that employee 50K and save them the trouble of filing a tax return.

And, this goes for the economic effects of government employees spending their money…our national wealth does not go up 1 copper penny when that government employee spend their salary.

Why? Because the money they spend would have been spent by the private sector if that person was never hired. There is no net economic gain.

So, the 85% of the people who work in the private sector pay all the bills in this country. 15% who work in government don’t contribute any. Now you know one of the reasons why the Soviet Union went belly up…no one was paying taxes because everyone worked for the government.

So what does that mean? It means if the government decides to hire someone the only benefit is the work they do, and that’s it. There is no tax or economic benefit from the government employing 20 million people.  So when some  politician or talking head tries to tell you the government hiring people helps the economy you can tell them how wrong they are.