These projects aren't just IT upgrades; they force the codification of unwritten, politically sensitive compensation rules. This process threatens to surface and eliminate practices like pension spiking, making true modernization a political restructuring that stakeholders actively resist.
By deputizing employers and spreading payments out, the government makes the cost of its services less salient to citizens. The annual tax refund further obscures the total amount paid, creating a "blissful moment" that psychologically reframes tax payment as a government payout.
A core service is guaranteeing employees are paid on a fixed deadline (Friday) even when employers submit funds late (e.g., Wednesday). This means payroll providers take on significant balance sheet risk, effectively acting as short-term lenders to their customers.
For the 1935 Social Security Act to work, large employers had to be able to comply. Consequently, the government designed withholding laws around the computational capabilities of IBM's existing machines, effectively allowing early technology hardware to shape national fiscal policy.
Public employees, often with departmental cooperation, artificially inflate their final years' salaries via overtime and temporary promotions to secure multi-million dollar pension increases. This practice is so embedded that the officials meant to stop it (prosecutors, police chiefs) are often participants themselves.
Significant float revenue in payroll doesn't come from the 1-2 day gap before paying employees. It's generated by holding the large sums of money withheld for taxes (e.g., for the IRS) for extended periods—often weeks—before they are due for remittance to government agencies.
The common tech narrative blames Intuit's lobbying for the lack of free government tax software. However, the primary opposition comes from powerful anti-tax advocates like Grover Norquist's ATR, who view simplifying tax compliance as a "tax increase by stealth" that makes raising taxes easier.