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The federal holiday of Labor Day, the first Monday in September, is supposed to be a tribute to American workers. While enjoying a day off, if they get one – government employees do – those workers might use the occasion to recall some other realities, including a longstanding government rip-off.
As we noted in July, for 71 years the federal government has been getting workers’ money before they do. Before 1943, their paycheck included all the money they had earned through their labor. Then the government said it was wartime, so they needed the workers’ money more than the workers themselves needed their earnings. So the federal government set up a “team of experts” that included economist Milton Friedman. This stellar team came up with the brilliant idea of withholding money from worker’s paychecks. It later occurred to Friedman that he was helping to make government too big, too intrusive, and too destructive of freedom. That is all true, but the government likes getting workers’ money before they do, so on Labor Day, 2014, the government still has its hand in the workers’ pockets.
As they enjoy Labor Day, workers might also recall that up to April 21 they were in effect working for the government. As we also noted, Tax Freedom Day marks the date when the nation as a whole has “earned enough money to pay its total tax bill for the year.” This year it was a full 111 days into the year, and three years later than last year. Because of new entitlements and new federal agencies such as the Consumer Financial Protection Bureau it will doubtless be coming later.
Labor Day implies that the federal government cares about the workers. That is doubtful, but one thing remains certain: the government likes getting the workers’ money before they do. This Labor Day workers will be hard pressed to find any politician or government official who seeks to reform this injustice. And as long as the government can grab the money, wider reforms against government waste, fraud, and abuse are unlikely.