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View Full Version : Do government and state workers pay income tax?


Pantone Swatchbook
01-15-2003, 11:44 AM
Excuse my ignorance on this matter, but do occupations like police officers, firemen, elected politicians, etc pay income tax on their salaries?

zev_steinhardt
01-15-2003, 11:46 AM
Yes they do.

Zev Steinhardt

photopat
01-15-2003, 11:47 AM
You'd better believe they do, or at least are supposed to. My father was a government employee for 30 years and always paid income tax.

zev_steinhardt
01-15-2003, 11:52 AM
Even the president's $400,000 a year salary is taxable (although he does have an additional, smaller expense account that is non-taxable).

Zev Steinhardt

dono
01-15-2003, 11:58 AM
It used to be that Federal employees didn't pay into Social Security - we had our own system, the Civil Service Retirement System, and were exempt. That all changed around 15 years ago, and all Feds hired since then are under the Federal Employees' Retirement System. FERS is a mix of SS/savings/employer matching, and it's portable if you leave Federal service.

There's only a few of us old birds left still grandfathered under CSRS. :cool:

Yossarian
01-15-2003, 12:06 PM
Pantellerite: State Employee, Taxpayer

In short: "Yes."

C K Dexter Haven
01-15-2003, 12:10 PM
First, I assume you are talking U.S. There are many posters here from other countries, where the rules might be different.

But the more precise answer is that they have to FILE tax returns, of course, like any other citizen or resident. Whether they actually PAY any tax depends on income level, number of exemptions, amount of deductions, etc.

SandWriter
01-15-2003, 12:22 PM
Yes they do, my wife works for the state.

What also might amaze you is that people that collect social security are also taxed on that income.

And depending on what state you live in, you are double taxed on your income, once when you earn it, and again when you pay a sales tax or property tax. In CA you used to be able to deduct your sales tax from your state tax, but not anymore.

There are a lot of websites that gather statistics on taxes, usually these are biased that you pay too much tax.

http://www.americanreformation.org/policy/Taxes/taxes.htm

Then there is the government information about who pays what taxes, but that data is, for some unknown reason, a few years behind. This is a link to a university with that data.

http://www.uic.edu/depts/lib/documents/resources/tax99/taxfacts.shtml

If you are weighing taking a state or government job v. the private sector, taxes are not part of the equation. However you might want to look at Job security and benifits, which are usually better in the government v the private sector. Of course, if there is a problem with the budget, then you may have to go a month or two without pay till it gets ironed out.

pravnik
01-15-2003, 12:29 PM
I'm a U.S. government employee, and I do pay taxes. They withold them accordingly from my paycheck. I likes it, 'tis very convenient.

Dinsdale
01-15-2003, 12:31 PM
Drat!
You mean these past 16 years ...?
Oh man, I hope no one finds out!

John Mace
01-15-2003, 12:42 PM
Correct me if I'm wrong, but I beilieve that members of the US Congress still do not pay into S.S. They have their own system set up. It's amazing that this is allowed to stand...

zev_steinhardt
01-15-2003, 12:49 PM
Originally posted by John Mace
Correct me if I'm wrong, but I beilieve that members of the US Congress still do not pay into S.S. They have their own system set up. It's amazing that this is allowed to stand...

Isn't there a municipality (El Paso, maybe?) that also opted out of SS and set up their own system?

Zev Steinhardt

Ferret Herder
01-15-2003, 12:52 PM
The last job I worked at, a state university position in Illinois, did not pay into SS either, but into their own type of pension system.

zev_steinhardt
01-15-2003, 12:58 PM
Originally posted by zev_steinhardt
Isn't there a municipality (El Paso, maybe?) that also opted out of SS and set up their own system?

Zev Steinhardt

Whoops, that was Galveston County, Texas.

Zev Steinhardt

kniz
01-15-2003, 01:00 PM
When I was younger (much younger), I couldn't understand why government workers were taxed. It seemed like a waste of time to pay them and then take it back. There are two reasons I can think of for taxing government employees.
[1] The rest of us would bitch about them not being taxed.
[2] They would bitch about not getting to take advantage of deductions.

Exapno Mapcase
01-15-2003, 01:01 PM
My wife did a Junior Achievement program with second-graders (in the US) last year that included the OP's question. They all knew that the asnwer was yes.

pravnik
01-15-2003, 01:11 PM
Originally posted by zev_steinhardt
Whoops, that was Galveston County, Texas.

Zev Steinhardt

Strangely enough, Galveston did indeed opt out of Social Security. Here's a Social Security Administration report (http://www.ssa.gov/policy/pubs/rptGalveston.pdf).

LurkMeister
01-15-2003, 02:09 PM
At one time almost all state and local government positions were exempt from paying Social Security taxes. Over the years some of these opted to join the Social Security system, but there are still a lot of them that didn't, preferring (as Galveston did) to set up their own retirement program.

BobT
01-15-2003, 02:34 PM
As a municipal employee, I don't pay into Social Security, just Medicare. A coworker asked me if she could make voluntary contributions to Social Security.

I talked her out of that.

black rabbit
01-15-2003, 03:40 PM
I'm a "public employee" in Ohio (not State, not County, long story) and I pay into the Public Employee's Retirement System rather than Social Security. I do, however, pay all the usual income taxes.

KneadToKnow
01-15-2003, 03:59 PM
I'm a U.S. government employee, and I do pay taxes. I'm sorry to hear that. Better luck in the next election.

: d&r :

drachillix
01-15-2003, 04:28 PM
My mother works for the IRS....she pays taxes...

Early Out
01-15-2003, 05:25 PM
Originally posted by dono
There's only a few of us old birds left still grandfathered under CSRS. :cool:
And don't volunteer to switch to FERS, no matter what! (I'm assuming you're still working.) Take it from someone who took early retirement under CSRS at the ripe old age of 46 (hence at least one of the meanings of my username!).

kunilou
01-15-2003, 06:34 PM
Mrs. Kunilou is a public school teacher. She of course pays all the usual state and federal taxes. However she belongs to a public pension plan and therefore does not pay into Social Security. However, that covers only her regular, contracted salary. When she teaches summer school or does other non-contract work, that income is subject to Social security taxes.

Confusing.

SandWriter
01-15-2003, 11:28 PM
I thought you were talking about Federal and State Income tax.

Social Security is a seperate issue / temporary retirement deal.

AFAIK members of congress pay Federal taxes and State taxes from where they reside or represent. IIRC it seems that it comes up every year as an issue with the press wanting to have the politicians income tax records made public.

We should be careful that this thread doesn't turn into a poll on who pays Social Security Tax and who doesn't

We should also be careful that this thread doesn't turn into a great debate on weather we should pay taxes or not.

photopat
01-15-2003, 11:30 PM
Originally posted by drachillix
My mother works for the IRS....she pays taxes...

Somehow that is an incredibly satisfying thing to read.

shulmahn
01-15-2003, 11:59 PM
Originally posted by John Mace
Correct me if I'm wrong, but I beilieve that members of the US Congress still do not pay into S.S. They have their own system set up. It's amazing that this is allowed to stand...

Ok, you're wrong. :D

In short: Congressmen and women pay into the Social Security System and into a separate retirement system..

from C-SPAN (http://www.c-span.org/questions/weekly68.htm) Since January 1, 1984, all Members of Congress also participate in the Social Security system and are required to pay Social Security taxes.

More information can be found in
this Congressional Research Service report. (http://www.house.gov/english/RL30631.pdf)

psychonaut
01-16-2003, 12:34 AM
Originally posted by kniz
When I was younger (much younger), I couldn't understand why government workers were taxed. It seemed like a waste of time to pay them and then take it back. How is the government going to figure out exactly how much to pay their employees, then? In every income-taxing country I am aware of, taxes are assessed on annual income, not per-paycheque. Furthermore, different employees will be claiming different tax credits and whatnot. Because personal situations and tax forms change every year, people don't usually know ahead of time which credits and deductions they're eligible for.

LurkMeister
01-16-2003, 10:00 AM
Originally posted by Early Out
And don't volunteer to switch to FERS, no matter what! (I'm assuming you're still working.) Take it from someone who took early retirement under CSRS at the ripe old age of 46 (hence at least one of the meanings of my username!).
I remember back when FERS was first starting and they were making a big thing about trying to get as many people as possible to make the switch. One of the supposed selling points was that if you already had some Social Security credits, but not enough to qualify for benefits (which was my situation), this would keep those credits from being "wasted." But I looked at the numbers more carefully and decided to stay with CSRS. I could take early retirement now, at 50, but with the age reduction it's not quite enough to live on. Maybe in a few more years, though...

David Simmons
01-16-2003, 11:17 AM
Originally posted by SandWriter
What also might amaze you is that people that collect social security are also taxed on that income.


To be strictly accurate there is an income test and if you are over a certain amount exclusive of Social Security then 85% of the Social Security is added to taxable income.

dono
01-16-2003, 01:08 PM
Originally posted by Early Out:
And don't volunteer to switch to FERS, no matter what!
Yup - hence the smiley!

(I notice your location is Reston - you didn't happen to work for the USGS, did you?)


Originally posted by SandWriter:
I thought you were talking about Federal and State Income tax. Social Security is a seperate issue
Quite right. In hindsight, I wish I had prefaced my post with

<slight hijack>

or

"We do pay income tax. Perhaps what you're thinking of is ...".

Early Out
01-16-2003, 05:35 PM
Originally posted by dono
(I notice your location is Reston - you didn't happen to work for the USGS, did you?)
Nope, I was a GSA drone. It would have been nice to work for USGS - I could have bicycled to work!

manhattan
01-16-2003, 07:11 PM
Does there remain a General Question on the table1?




1The tax table, of course. Ah, I slay me.

Keweenaw
01-16-2003, 07:22 PM
I had a neighbor who was a Michigan State Policeman. He did pay State and Income tax, but not Social Security. Apparently they have (had?) their own system.

heresiarch
01-17-2003, 12:37 AM
Military personnel also pay taxes.

But, if we don't live in base housing, we receive a housing allowance which is non-taxable.

Also, troops deployed to combat zones are not taxed. Troops in South Korea currently pay taxes, but some people are lobbying to make that a tax-free zone.

Early Out
01-17-2003, 08:28 AM
The only quasi-government workers who are exempt from Federal and state income taxes, AFAIK, are employees of the World Bank, in D.C.