lectur3-page51 - state income taxes the employee pays as a...

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Let’s take a look at a hypothetical government employee earning $40,000 per year plus benefits (health insurance, retirement, disability, etc.). Depending on the employee’s family situation, he/she may be paying about 20 percent of their gross salary in federal and state income taxes. Assuming that our government employee would be equally productive in the private sector, could we think of the federal and
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Unformatted text preview: state income taxes the employee pays as a “taxpayer rebate?” The net cost to the taxpayer in this example, is $32,000 plus the value of the benefits the employee receives. Now, what does that government employee do with that $32,000 of taxpayer money. Does that employee bury it in the ground? Hide it in their mattress? Put it in a safe deposit box? Open a Swiss Bank account? 51...
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