Reuters: Taxed by the boss
Across the United States more than 2,700 companies are collecting state income taxes from hundreds of thousands of workers – and are keeping the money with the states’ approval, says an eye-opening report published on Thursday.
The report from Good Jobs First, a nonprofit taxpayer watchdog organization funded by Ford, Surdna and other major foundations, identifies 16 states that let companies divert some or all of the state income taxes deducted from workers’ paychecks. None of the states requires notifying the workers, whose withholdings are treated as taxes they paid.
At first sight, this seems awfully familiar to any student of medieval history; it's tax farming. The rationale this time is that this is a way to pay subsidies to companies directly. It's still tax farming.
Any discussion of something like this inevitably degenerates into the usual leftist claptrap of public=good and private=bad. That totally obfuscates the real problem with arrangements like these, which effectively combine the worst of private and public: the lack of public oversight inherent in a private organization and the coercive power of a public one.