Good article. In my opinion, this entire house of cards, at federal, state and local levels was predicted on an always growing economy and the premise that real estate - the source of net worth for most Americans - would always rise. Of course, we ran out of guys making enough to enter the market a normal downstroke and a straight 30 year mortgages, and exported the higher paying union jobs in manufacturing. This has been going on since at least the seventies. All these individual pension plans are legally binding contracts, so you can't just renege unless you go bankrupt. Again, at all levels. So it seems to me all you can do is bring in a progressive income tax that is more aggressive or a Value Added Tax. I lived in Austria when they brought it in, and remember seeing the breakdown on the menus, which was required. In some places the total taxation for the meal and service was 52% of the cost. They have been taxing fuel and all products with the VAT ever since, and everybody pays it. We have been financing the true costs of all our activities for decades. If we factored in part of the cost of the DOD into the fuel we get from abroad it probably is costing us &7 or $8 a gallon, but you don't pay that. We borrow to cover it - I think I heard Alan Simpson say that interest on the debt would rise to $650 billion in a year or two. If we borrow to pay that we'll be just like the guy with no cash and lots of plastic. The party will really be over when we are taxed so heavily that we have no disposable income to spend. Then the small businesses that are still left will fold. Then what? Don't blame Obama - this goes back to Reagan, minimum/ Remember when Clinton had a huge surplus? The shrub pissed that away with tax breaks for the wealthy and no taxes for the wars. As the man said, "You asked for it, and now you are going to get it. "
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Pensions
(92 posts)-
Posted Saturday Feb 20, 2010 12:54 #
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What is a tax break for the wealthy?
Posted Saturday Feb 20, 2010 17:32 # -
Example:
Microsoft Millionaire: Why I Should Pay More Taxes
By Arul Menezes, August 1, 2009In recent weeks, there has been a lot of discussion about raising taxes on the wealthy. As a higher-income person who would pay such taxes, I have no objection.
I grew up in India and came to the United States in 1988. I attended graduate school at Stanford and have since had a successful career in the technology industry. There is no other country in the world where this could have happened.
I could choose to tell my story this way: “I arrived with $250 in my pocket, and got where I am based entirely on my hard work.” This is true, but it’s not the whole truth.
A more honest reckoning would take into consideration that I received an excellent engineering education paid for by the taxpayers of India, and that my graduate education at Stanford was funded by National Science Foundation grants and other U.S. government investments in scientific research.
My professional success — and that of the technology industry as a whole — was enabled, in part, by the advent of the Internet, itself a creation of public investments in research and development and by the available pool of talent, trained and nurtured by our public education system.
A more accurate telling of my story would consider that every day I benefit from schools, hospitals, roads, bridges, parks and civic amenities that were built and paid for by previous generations. They were much less well off than we are today. Yet they had the collective will to invest in their future and the future of their children.
I am worried, though, that things are changing in America. The kinds of public investments that made my success possible are vanishing.
Two decades ago, the United States was unique in its meritocratic system and the depth of infrastructure that enabled individuals to succeed.
But during the last decade, taxpayers in my income group received significant tax breaks.
The Bush-era tax cuts gave $700 billion in breaks over eight years to those of us with annual incomes more than $200,000. The United States borrowed money to make these tax cuts possible, even as our schools, infrastructure, research institutions and social services were in need of new investments.
This is extremely shortsighted. Our investment as citizens in our collective “commons” lays the foundation for our individual wealth and success. That’s why I’ve joined hundreds of other high-income taxpayers in calling for a reversal of these tax cuts. This would generate roughly $43 billion in annual federal revenue, which could be used to make investments in public education, health care and revamping our nation’s energy system.
Taxes are the price we pay to live in a civilized and healthy society. Those of us who have disproportionately benefited from public investments have a responsibility to pay back our society so that others can have similar opportunities.
It is only just and fair that our generation make comparable investments in our future to ensure that America continues to offer our children and grandchildren the same kind of opportunities it offered me.
Arul Menezes is a principal architect at Microsoft Research and a member of Wealth for the Common Good
Google "Bush Era Tax Cuts" and you'll be busy for a long time...
Posted Saturday Feb 20, 2010 18:14 # -
Progressive taxes are the most unfair taxes possible in a country where we are supposed to be equal. The government should be able to survive on a flat tax of 13%.
Remember a tax cut is another way allowing people keep the money they earn. Perhaps if they get to keep their money they might open a business or hire more employees. But I may be wrong.
I will not put this website's future in jeopardy by cutting and pasteing what I would think is copyrighted material so I will link to an interesting article > http://www.dallasnews.com/sharedcontent/dws/bus/columnists/sburns/stories/DN-burns_04bus.ART.State.Edition1.4603045.html
Posted Saturday Feb 20, 2010 20:13 # -
Nor will I.....
Here is a STUNNING account of private vs. public section compensation from the Bureau of Labor Statistics, US Department of Labor.
Posted Saturday Feb 20, 2010 20:41 # -
Long time no talk everybody. I haven't posted in a long time but could not help chiming in on this topic.
Rick, when it comes to Riverside issues you and I agree more often than not. However, I have to say I had a good laugh reading your previous post that was based on a premise that "we are in a country where we are supposed to be equal". You don't really mean that in the way you tried to apply that statement do you? Because if you use that premise to argue equality of taxation then others will use it to argue equality of outcome such as income. It goes something like this, we are all supposed to be equal and therefore in the end we all should make the same amount of money. Sounds a whole lot like real socialism to me and not something that many people in this country would sign up for. The equality you should argue for is equality of opportunity not equality of outcome. To a large extent I think we have equality of opportunity in this country and a natural byproduct of this belief is that those that benefit the most from the opportunities presented by our society should also be expected to bear a larger percentage of the cost to maintain the societal infrastructure and practices that contributed to their success. I think that is the point that is being made in the article posted by Mr. Spatny and one that I wholeheartedly agree with. I find it interesting that this point seems lost on many who were born and raised in this country but is very evident to recent immigrants who clearly realize that their success is not only a product of their hard work but also of the opportunities that are present in this country but not necessarily present in the countries of their birth.
Posted Sunday Feb 21, 2010 11:15 # -
Did Rachel Maddow actually have a response to Glen Beck's pension program? The pension issue is widely written about in newspapers from coast to coast. Virtually every paper, liberal or conservative, in both their news pages and their editorial pages, has written about the role public sector unions and their benefits are playing in the ecomonic problems of states and cities. Yet, I have never heard anyone on MSNBC discuss this topic. Occasionally, someone, like Mike Barnicle, will mouth a sentence or so on the reality of the teachers unions in big cities - referring to the New Yorker article on the Rubber Room. MSNBC has largely become a cheerleader for the current administration. There isn't anything positive to say about these pension plans and the growth of the public sector employement and its relationship to the 22 visits that Andy Stern has made to the White House. As a result, they just aren't talking about, even though it is a hot topic in newspapers across the country.
Posted Sunday Feb 21, 2010 11:30 # -
This comment from the Pew Trust report on pensions struck me. “Now we know the magnitude of this bill—and paying it will require an enormous investment of taxpayer dollars,” said Susan Urahn, managing director of the Pew Center on the States. “For states that have dug themselves into a deep hole, there are no quick and easy solutions—but there are fiscally responsible steps all states can take. These will require time, attention and, above all, political will.”
That's the same throughout the whole system, and not just in this country. It's a worldwide part of representative democracy. The elected pols will strive to attract votes, the antithesis of doing what is required. We may disagree about whether it is more important to slash programs (the ones we don't favor, of course) or raise taxes (usually on those perceived as having more and thus deserving to pay a bigger part of the bill for keeping society working.)
I don't ride the CTA, but I recognize that it needs to be kept going with reasonable service at affordable prices or the roads, where I do drive, will clog. So I need to be taxed for my part. I think the schools should be safe and clean, have good teachers and equip students with the tools they need to live and work - maybe that should be reprioritized as work and live - so even though I don't have children I gladly pay my share. Obviously I object when I think the money is not spent wisely - all across the board - but I'm not so naive to think that stupidity, venality or plain greed is going away. There will be waste, boondoggles, crime - all of it. But because there is I am unlikely to get out of being obligated to cough up. (As I did again this week.)
The burden of the "entitlements" we (meaning our elected representatives) have contracted for are going to increase and can hardly be downsized or eliminated. You can't put Grandma in the snow drift and if you try to do it to me you better have your affairs in order. We all know that health care costs are spiraling out of control, and aside from the very few who get some Rolls-Royce-like health coverage paid for by someone else almost no one things this is a good system. I personally hope that the Senate goes to reconciliation and passes a reform bill with a strong public option because without it there will not be sufficient competitive pressures on the insurers to shave their profits. If there was only one brewery beer would be swill and cost $20 a glass.
Something like social security - as little as it is - is absolutely necessary. It works when the country does. Currently it is bleeding because the numbers coming in (boomers) are so great and jobs and wages have been exported to areas where our workers are forced to compete with the lowest paid workers in the world. So that needs work too. (And I think it should not be taxed and probably means tested - but that's another whole subject.)
I believe that we will have to alter the tax code and make it more progressive (heavier taxation at the top), close a bunch of loopholes, AND get into a value added tax. Things are that bad. I'm not saying I like it - I just read the numbers and look at population trends here and abroad and don't see how else it can be kept going. Those kids that are out on the Hauser playground are in competition not only with 300 and some million other Americans but billions of others. When I graduated at RBHS we had 160 million, and I thought that was enough. Chicago is a big enough problem at 2.5 million - what you do with Mexico City (17-18 mil.), Sao Paulo (22 mil) or Cairo (18 mil) is anyone's guess.
If the social contract that made teaching (for example) a better rewarded occupation than it used to be is not continued, what will happen? I doubt the existing contracts for things like pensions, health care can be altered to any meaningful degree, but contracts going forward must be based more on sustainability. Amazing how looking at and reading about and thinking on all of this can put a spring in the step of a 73 year old, but it does. I haven't got far to go so I won't see the worst of what's coming, so I am in favor of much tougher and more radical solutions NOW, not later. I want to see the curve bend and start trending back toward more stability and better times. I don't have the time to screw around with pols that won't move. It will get worse if we don't act - so let's do it.
Now I'm going to watch the Olympic Hockey. I think Slovakia is a strong dark-horse contender.
Posted Sunday Feb 21, 2010 12:35 # -
here is a start at pension reform...
State House passes bill to trim pensions of judges, lawmakers
March 19, 2010 4:44 PM | No CommentsSPRINGFIELD --- Future lawmakers and judges would have to wait longer to retire and their pension checks would be scaled back under a measure the Illinois House passed today.
The measure was sent on a 109-0 vote to the Senate, which is working on its own version of changes to public employees' pensions as state officials try to dig out of a huge budget hole.
The state faces a pension liability of tens of billions of dollars - the most owed out of any state in the nation, according to a recent report by the Pew Center on the States.The measure would raise retirement age for full benefits from 55 to 67 for future lawmakers and 60 to 67 for future judges after July 1. They could retire before 67 under the new plan, but the benefits would be lower.
Read more on Clout Street.
...Posted Friday Mar 19, 2010 18:41 # -
Good. I hope it passes the Senate to become law.
Posted Friday Mar 19, 2010 20:13 #
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