People have gotten use to Form W-2s, which keeps track of your yearly income and is reported to government agencies each and every year for purposes of calculating not only your future social security and other government benefits, but also for the express purpose of determining your actual wage income and from that the basis an indication of your tax liability to the State. The detail of the information provided to the government includes your Social Security number, your legal name, your employer's Identification number, addresses, and wages. While it certainly makes sense that the government needs to know this information in order to determine future governmental benefits, this W-2 information is at the same time the basis for any agency or entity, to formulate a real good idea of your financial wherewithal.
That is to say, the government or whomever has access to your W-2 and/or your 1099, if applicable, can at its discretion easily determine a baseline analysis of what you should or shouldn't have as material assets primarily based on your declared income and any other activities that are in the public domain. This means, that the government, in theory, at any time, can prosecute people that appear to have assets that are well beyond what their legal income has declared, for tax evasion, or other similar crimes.
The thing is once the government is materially aware of what income that you make, with a little legwork about your background, they can readily determine forthwith whether you are or are not someone that appears to have more in material assets than what the government believes is conceivable, given your circumstances. This means that in the scheme of things, that the tax arm of the government, can always be used as a cudgel against people that for one reason or another, the government has not been able to file actionable charges against.
The fact of the matter is that the W-2 operates fundamentally at a level that allows the government to track and to monitor you, and while that may be fine when dealing with governmental authorities that are moral and upright, it is not fine when dealing with governmental agencies that are compromised. Further to the point, the more information that entities have that are not subservient to you, in which specifically they know the trajectory of your income, the more power that they hold over you.
Nowadays, for the most part you cannot work without proper identification of yourself, and receiving in return a W-2 or a 1099 form for your labor. While this may seem like a fair and safe thing, and while to a certain degree it is, what it means is that for people that just wish to be anonymous for whatever reason while providing an honest day's labor for an honest day's wage, the government does not sanction such a thing. In fact, the government has specific rules in regards to the filing and reporting of income that penalizes both the party that should have issued the 1099 as well as the party that fails to declare such income on their tax return.
There was a time when W-2s didn't exist, but when Americans gravitated to a desire for the new "nanny state", it meant giving power to the government to monitor and to track their income, and relinquishing their own sovereignty while doing so.