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The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

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Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#111

Post by tiatia123 »

sykhic wrote: post #33

Overal taxation in the U.S. is low compared to other OECD countries [1]. We, as a nation, decided that low taxes was the goal. As a result infrastructure is poor, toll roads are increasing, privatization of prisons, intelligence gathering, war, etc. are rising too. Yet Americans falsely believe they are overtaxed. The situation is easy to fix in economic terms but not in political terms. The road to an Ayn Randian pa…

"The road to an Ayn Randian paradise in which everyone fends for themselves will lead us to ruin."

Possibly. But having fend all for myself just to stay alive, I don't feel the need to fend for others. But go ahead. You have my blessings. My blessings but not my money!

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#112

Post by adventured »

rayiner wrote: post #104
ars wrote: post #74

Earlier quoted context omitted.

I didn't realize US taxes were so high in comparison to other countries. You are looking at the wrong table. Look at the next table instead and see just how high the US is relative to other countries. The only thing we don't tax is goods, but that's to help lower income people - the same people you want to help.

You raise the other really important consideration, which is that if we were to raise taxes to the same levels as Germany or Sweden, taxes wouldn't go up on rich people and corporations: https://taxfoundation.org/how-scandinavian-countries-pay-the... . The top marginal tax rate for someone in California, even with the Trump tax cuts, is similar to someone in Sweden. The difference is that in the U.S., the 50%+ rate k…

The US middle class is entirely oblivious to how extraordinarily low its taxes are. Despite having one of the highest disposable income levels on earth, it somehow manages to blow all of its money on consumer crap from China, $300/month cell phone plans, $200 DirecTV plans, etc., instead of saving it. That's despite the US having a lower cost of living than Germany and France.

All the right politicians bleat about lowering taxes - you really can't, the rich are already paying for everything as it is now, we can hardly get more progressive (on income taxes at least). You can't lower taxes on the bottom 75%, it's just pandering. The left bleats about the well-off not paying their fair share, somehow paying for nearly everything isn't a fair share. They're both wrong as usual. More plausibly, to pay for ballooning entitlement costs, infrastructure, expanding healthcare, etc. taxes need to go up on everyone.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#113

Post by ngngngng »

betterunix2 wrote: post #9

The choice is raising taxes, reducing spending elsewhere, or demanding workers give up the pensions they were promised. Somehow I doubt anyone is going to agree to pay more in taxes to cover pensions in their state or city. After all, why should the government keep its promises (especially if it means we have to pay for it)?

Does stability in retirement add enough value to society and the economy for it to be a good investment? I've been an adult less than a decade, so without a return why should I pay for the promises of my predecessors? So many questions.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#114

Post by jstewartmobile »

abledon wrote: post #31

How much money does one need to live in retirement? If they are doing daily exercise(1-2hr), cut out most processed foods and sugar , no alcohol , cook all their food from scratch using cheap staple ingredients , entertain themselves with books , community , local events and cut out expensive vacation plane trips (only an invention of the past century). An ‘uncomfortable’ lifestyle shift but doable for a human. [edit…

You're talking humanity here abledon. Too bad that isn't what the internet wants.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#115

Post by chris_mc »

gok wrote: post #53

> It is increasingly likely that retirees, as well as new workers, will be forced to take deeper benefit cuts. Boohoo. Public service union members should have thought about that before pursuing a pyramid scheme retirement plan instead of a defined contribution pension like the rest of us.

Why in the ever loving fuck are you blaming the _workers_ for this shortsightedness instead of the government organizations who are about to fuck those people over when they're 70?

Maybe the administrators of the pension accounts and financial planners for these organizations should have done better by the people who are busting their (collective) asses to provide services for you, the taxpayer?

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#116

Post by betterunix2 »

omegaworks wrote: post #21
betterunix2 wrote: post #9

The choice is raising taxes, reducing spending elsewhere, or demanding workers give up the pensions they were promised. Somehow I doubt anyone is going to agree to pay more in taxes to cover pensions in their state or city. After all, why should the government keep its promises (especially if it means we have to pay for it)?

>The choice is raising taxes, reducing spending elsewhere, or demanding workers give up the pensions they were promised. Why is there a fourth option for banks and not for pensions? Why is Quantitative Easing left out of this discussion?

QE is not something municipal governments can do, so it is irrelevant to this discussion. Since you brought it up, it is worth mentioning that QE actually contributed to the pension shortfall because pension funds suffer when interest rates are low.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#117

Post by dv_dt »

ars wrote: post #87
dv_dt wrote: post #54

Earlier quoted context omitted.

How much money does the low-taxed wealthy need that so many others need to live a paupers life style. Is there not productivity enough in our society to provide better?

What are you talking about? The wealthy are not low taxed, the US taxes the wealthy more than just about any other OECD country. Source: https://www.taxpolicycenter.org/briefing-book/how-do-us-taxe... Figure 2.

What are you talking about? figure 2 is a share of total tax total revenues by source. Figure 1 shows that Us total tax percentage of GDP is lower than every OECD nation out there with the only lower total tax share in the nations of Korea, Ireland, Chile and Mexico.

The figure 2 breakdown also does not distinguish between taxes on Income + "profits", and capital gains and corporate taxes where the wealthy accrue significant wealth are very low in the US...

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#118

Post by sykhic »

jwess wrote: post #101
sykhic wrote: post #33

Overal taxation in the U.S. is low compared to other OECD countries [1]. We, as a nation, decided that low taxes was the goal. As a result infrastructure is poor, toll roads are increasing, privatization of prisons, intelligence gathering, war, etc. are rising too. Yet Americans falsely believe they are overtaxed. The situation is easy to fix in economic terms but not in political terms. The road to an Ayn Randian pa…

Perhaps people feel overtaxed, not in absolute terms, but relative to the services provided? The US Gov collected approximately 3.3T in revenue in FY2016--more than $10,000 for every person in the country. By comparison, the Netherlands collected 255B Euros from a population of 17M, or about $17k USD per person (2016 figure, according to OECD statistics). Clearly, a much higher number at the federal level, but they h…

Yes, clearly the return on services and government investment is quite poor in the U.S. It's a situation in which people reasonably believe that paying more in taxes is throwing money at the problem. This is especially so when one of the major parties actively seeks to prove that government is incompetent.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#119

Post by dpatrick86 »

xeromal wrote: post #48
spullara wrote: post #22

Earlier quoted context omitted.

You could increase the taxes on pensions to return them to sane levels.

I feel wary of doing this because I feel this is what's going to happen with my IRAs. I was promised that if I pay my taxes now I don't have to pay them when I'm old, but supposed the next generation decides they want to change the rules. Do I just pound sand and give up? Pensioners were given a promise and now we're changing the rules. It feels wrong even if the promise was unrealistic.

Just for clarification... you described a Roth. Usually, when someone says "IRA" without further qualification it would be assumed to be a traditional.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#120

Post by dunpeal »

sykhic wrote: post #103
dunpeal wrote: post #88

Earlier quoted context omitted.

> The problem is public sector employees are promised pensions higher than county/city can afford. Precisely. But in fact, it's worse: The people doing the promising and those receiving the benefits are in fact the same. Who makes the promises? Local and state government employees. Who receives the benefits? Local and state government employees. Who pays for them? Us ordinary taxpayers who can only dream of such swee…

I'm a public employee. I don't cause the government to write its contract with me to be the way it is. It's negotiated between my union and the state Department of Education. It is then voted on by the legislative branch and signed by the governor. It's a long process. At no point am I or my fellow workers the ones making the promises. It costs money to run government. Employees need to be paid. We have had lay offs…

> I don't cause the government to write its contract with me to be the way it is. It's negotiated between my union and the state Department of Education.

Exactly. So one group of state government employees (your state's DoE) meets another group of state government employees (your union) and decide to give each other an incredible defined-benefit pension deal that nobody outside of government can even dream of.

State government employees are giving each other dream pension plans, that are unsustainable and wildly over-budget even if they were well-managed (which generally they are not).

You know why nobody outside government has defined benefit pensions? Because they were proven to be unsustainable decades ago. Yet government employees keep conferring them upon themselves.

Then, when the inevitable deficit arises, as any economist would predict, you have a great solution: me and my peers in the private sectors should pay more taxes to bankroll your party!

I hope this slow-motion trainwreck would be a wakeup call, but either way, know this: there is no amount of taxes that will prop up your unsustainable pension plans. State and local governments wasted billions mismanaging these funds, that are unsustainable even under the best management.

Any more taxes you collect will just fuel this fire for a couple more years, before the inevitable next crisis arises.

You can't fix fiscal irresponsibility with more money, because all that money (and no accountability) is what created fiscal irresponsibility in the first place!

Your state government needs to start applying the same basic fiscal responsibility that every single business in your state is adhering to.

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