Dave Tavres had this idea of what it would be like if Teachers would be income tax-exempt…
– all – of their pay comes from OUR taxes. So the government taxes US on our income, pays the teachers, then taxes THEM on the money that we already paid taxes on!
Let’s think this through a bit more. If we stopped taxing teachers, the government would have a tax revenue short-fall. Except this would never really happen – to give tax breaks, the government always increases taxes somewhere else – meaning to make up for lost tax revenue going to teachers, everyone else would have to pay more taxes. Additionally, the IRS would need a whole new department to verify teachers are tax exempt. Many teachers also get second jobs – would income from the second job be taxed? Hmmm. If so, tax forms got just more complicated. If they don’t tax second jobs, those second jobs must deal with deducting taxes from some employee’s pay and not others. I see $$ in upgrades to new payroll software and additional IRS jobs here :).
I think it would be simplier to just pay the teachers more – either way the money comes from us, as Dave correctly points out. And just paying them more keeps our tax codes simplier.