Earlier this month, Rep. Jason Chaffetz (R-UT) introduced legislation that would require the government to fire federal workers who fail to pay their taxes, and prevent the government from hiring those with "seriously delinquent tax debts." According to Chaffetz, his proposal is perfectly in keeping with President Obama's recent effort to prevent tax delinquent companies from winning government contracts. Chaffetz's reasoning, however, is grossly oversimplified, and his bill, which is resultantly flawed, looks like a knee-jerk attempt at retribution for the private sector.

The claim that tax delinquent federal employees, like tax delinquent contractors, shouldn't be able to earn taxpayer dollars might sound reasonable – except for the fact that President Obama's initiative aims not only to recoup back taxes and make companies tax compliant, but also to root out waste, fraud and abuse within government contracting.

Companies that fail to pay their taxes are more likely to fall short of basic contract requirements. Research by the Center for American Progress Action Fund on the poor treatment of employees by some contractors found a correlation between a contractor's "failure to adhere to basic labor standards and wasteful practices and sometimes even a correlation between this failure and illegal activity." I could be wrong, but I don't think there's any evidence pointing to a correlation between federal employees who fail to pay their taxes and poor work output or criminal activity.

Additionally, to summarily dismiss a worker if the Internal Revenue Service (IRS) places a notice of federal tax lien (NFTL) on the employee's assets is problematic to say the least. In a recent hearing on the National Taxpayer Advocate's (NTA) 2009 Annual Report, NTA Nina Olson testified that the federal government's application of NFTLs is abusive and in desperate need of reform.

Similarly, as Colleen Kelly, president of the National Treasury Employees Union, pointed out at a hearing on the Chaffetz bill, "[t]here are currently rules in place that allow employees to be disciplined and even terminated for serious tax delinquency" and terminating a federal employee for receiving an NFTL "would deprive them of the right of due process."

Lastly, contractors don't necessarily rely on government contracts for subsistence, whereas federal workers likely rely on their job as their sole source of income. To sever that source of income because the IRS has placed an NFTL on an employee's assets is counterproductive to the federal government's ultimate goal of collecting the money owed it.

I know that Rep. Chaffetz probably gets angry when he thinks about how "good" federal workers have it, what with their high pay and non-bureaucratic work environment and all, but firing employees for receiving an NFTL simply because the government bans tax delinquent contractors is less than smart tax policy, it's just petty.

Image by Flickr user wickenden used under a Creative Commons license.