Madam, – Alex Cleland’s idea (July 12th) of paying public sector workers salaries “net of tax” to reinforce the message that they are net beneficiaries of the tax system is a dangerous step onto the all-too-familiar path of regarding public sector workers as tax leeches.
Let’s be clear, workers in any part of the economy are paid in relation to the value their labour yields to their employers, and hence to the wider economy. This pay is their reward for the output they produce, and is counted towards the country’s GNP, whether in the public or private sectors.
The difference of course is that in the private sector, the market values the labour, and in the public sector, the labour value is benchmarked (in one way or another) against what the market would pay an equivalent worker in the private sector.
Now, that benchmarking process is political, and the numbers that come out are often disputed. But to pay civil servants “net salaries”, as Mr Cleland suggests, would completely upset the link between their valuable work and the pay they receive for it. It would artificially reinforce stereotypes and create sectoral imbalances every time taxes were changed.
Most importantly, it would reduce public sector workers’ sense of having a stake in the system. Unfairly so, for there is nothing to suggest their contributions are not equally valuable to the economy as those from the private sector.
Those who doubt this contribution might consider the alternative – countries with no government sector and no tax structure, such as the old (Taliban-controlled) Islamic Emirate of Afghanistan. – Yours, etc,