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That sounds like union busting to me. Forget all of this economic mumbo jumbo and think of the working people of this country.
I am. Regardless of what you think of state union workers, there are far more non-union, non-government working people who will be hurt by a government failure or radical increase in taxes than there are union government workers.
I am. Regardless of what you think of state union workers, there are far more non-union, non-government working people who will be hurt by a government failure or radical increase in taxes than there are union government workers.
So, yes, please DO think of the working people.
Thanks to the Tax Foundation and other sources, we've analyzed tax rates over the past century, along with government revenue and spending over the same period.
This analysis revealed a lot of surprising conclusions, including the following:
Today's government spending levels are indeed too high, at least relative to the average level of tax revenue the government has generated over the past 60 years. Unless Americans are willing to radically increase the amount of taxes they pay relative to GDP, government spending must be cut.
Today's income tax rates are strikingly low relative to the rates of the past century, especially for rich people. For most of the century, including some boom times, top-bracket income tax rates were much higher than they are today.
Contrary to what Republicans would have you believe, super-high tax rates on rich people do not appear to hurt the economy or make people lazy: During the 1950s and early 1960s, the top bracket income tax rate was over 90%--and the economy, middle-class, and stock market boomed.
Super-low tax rates on rich people also appear to be correlated with unsustainable sugar highs in the economy--brief, enjoyable booms followed by protracted busts. They also appear to be correlated with very high inequality. (For example, see the 1920s and now).
Periods of very low tax rates have been followed by periods with very high tax rates, and vice versa. So history suggests that tax rates will soon start going up.
To get this back on track I would suggest that a HUGE issue in the original linked article is the degree to which Chicago has managed to avoid socking it to home owners. It is frankly shocking how high taxes for home owners in parts of Cook Co with little non-residental development. There was a request in another thread to suggest suburbs where a family of six might find a bigger home for under $225K. I suggested the south suburbs and I was frankly sickened by the property tax bills I saw -- nice enough four bedrooms that have been on the market for far too long at prices under $200K with property tax bills OVER $10,000. That is just madness. Income taxes are one thing, especially if they "magically" get deducted from one's wage before you ever have a chance to mentally spend 'em, but to slug families over the skull for such a huge percentage of their home's worth and pretend it is in the interest of "working people" that mow the Forest Preserves, fight the fires, police the streets and other such essential services while ignoring the corruption of insiders that lard up their own fat kitty of TRULY "golden years" is not tolerable.
I'm not sure you appreciate the legally binding nature of pension contracts, these aren't just a benefit the state grants on a whim. They are legally binding contracts negotiated between two parties. Workers are required to contribute as much as 10% of their salaries and all of their Social Security taxes to the pensions. The state is responsible for contributing any additional money needed to ensure that promised benefits are funded. Absolving the state of that responsibility is to throw contract law out the window.
Thankfully our legal system is set-up to where the courts, and ultimately the USSC, can change the law as needed. I think one part of the problem with these pension contracts is that they were negotiated in bad faith. The unions give money and push members to votes for politicians. If elected, those are the same people sitting across the table, or they will have some liaison once removed. We are really supposed to believe these bought and sold for politicians have the taxpayers best interest in their minds?
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Originally Posted by Attrill
If the state decides to reduce pensions payments unilaterally it would likely do nothing but create millions in legal fees for the state, the pension contracts are rock solid and binding.
That is what some bondholders of GM/Chrysler debt thought. Some felt they would get paid in full, while other bondholders got nothing. However, the government, with the backing of the courts, basically said everyone would share in the pain. So everyone got something, but no one was made whole. I've read and heard this is contrary to how corporate bankruptcies have been handled in the past.
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Originally Posted by Attrill
In addition to that do you think it is morally right to have workers spend 30+ years saving for retirement based on legally contracted benefits and then yank them away after that person has retired? That's like a company seizing decades of matching 401K contributions as a person nears retirement.
The contracts were negotiated in bad faith. I personally think it borders on fraud. Public union collective bargaining is bad when it comes to some things, good for others. Those things that deal with money usually mean the taxpayers get hosed. This isn't just a Democrat issue, even though they have more to gain given just how much the Democrat party gets in union bribes, I mean campaign contributions. I've also seen this in suburban Republican controlled areas in some major cities. These are your more pro-big government Republicans who usually have minimal social service needs in their communities, and usually upper middle class to rich populations. They will take care of the government workers, especially the police officers, to keep everyone happy.
Public pensions are going to be drastically cut in some areas. The benefits are obscene, the calculations are obscene in states like Illinois and California. The chickens are coming home. Unless you and others are willing to start paying at least another 10%+ in income taxes to the state pension funds, there is no way to payout those benefits.
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Originally Posted by Chi-town Native
Private sector and private sector retirements aren't tied to each other whatsoever - when private sector 401Ks were exploding in the tech boom, you didn't see govt workers getting some benefit out of this.
This is the problem with the state of the economy- everyone has forgotten how good the private sector has it during the boom times. Govt workers have always, always, always traded lower wages in the "now" for more job security and a pension in the "later."
There is a lot of half-truths in these paragraphs. For starters, Indiana offers a basic pension, plus an annuity, which is similar to a 401(k)/IRA account. The annuity is 3% of your wages, and depending on what kind of government will determine if the employee pays or the employer pays. For years, those workers had the option to invest in a guaranteed fund, money market, large cap fund, small cap fund, and bond fund. It wasn't the greatest, as you had to make your change 30 days prior to the new calendar quarter. A few years ago, things changed. An international fund was established, as well as a few "target retirement year" funds. You can also change your investments and contributions at any time. Trust me, there are public workers that lost, and some that won.
As far as lower wages, that really can't be compared to the bulk of your government jobs. Look at state park concessions. Most are likely privatized already, but back when government workers worked them, they didn't pay that far off from private sector. And many mom and pop stores didn't offer 401(k) matches, healthcare, and other insurance benefits the state offers. Then you have the jobs of firefighters, police officers, and teachers. How do you really compare those to the private sector? There are minimal private firefighting service districts left in this country. They are the ones you hear about not putting out a fire because someone didn't want to pay $40-$100/year for fire service. Only the government, with some minimal exceptions, can appoint law enforcement officers to arrest offenders and keep the peace. I know an Indy cop who make $90K. Most make $60K after three years, get a take home vehicle to drive to and from work (worth about $5,000ish), and get over-time and can work off-duty making around $25-$50/hour. You can find a functional, good home in any area of Indy for $175,000. So we have cops making anywhere from $65,000-$100K/year, and we are supposed to feel sorry for them? We have teachers in our area making $35-$55K/year (depends on many factors), with summers off. If they work during the summer, they make more. This doesn't factor in cheap benefits, at least until recently where contributions to healthcare had to rise.
Government service isn't about the money, but more and more it is about the money. If one doesn't like the add contributions for pensions and benefits, quit. If one doesn't like the lower future pension payouts, quit. If one doesn't like the cut backs in wages, quit.
Quote:
Originally Posted by Chi-town Native
Contrary to what Republicans would have you believe, super-high tax rates on rich people do not appear to hurt the economy or make people lazy: During the 1950s and early 1960s, the top bracket income tax rate was over 90%--and the economy, middle-class, and stock market boomed.
I love these stats with minimal information. For starters, what do we currently define as "rich people?" How many are there now, vs. back in the 50s and 60s? Second, were the rich people back then paying similar taxes we have now on automobiles, homes, etc. like we are now? Did they purchase $500K-$1,000,000 vacation homes that they only live in a few months of the year, yet pay taxes for the entire year, not using the K-12 school resources? This statement deals with income tax rates. What were the Medicare tax rates back then? Social security? What about state income tax rates, and local income taxes in those urban areas that tend to have more "rich people?"
Municipalities only have so much money. Chicago has a large lower income population, and they consume a huge amount of resources. You add in the pension liabilities, and the state and many municipalities are bankrupt on paper. Go ahead and tax the "rich people." If Chicago is such a great place, the rich folks either won't mind paying more, or they will just complain about it and stop their feet. Surely they wouldn't move away if the city is just all that?
btw, just what brings you here all the way from Indianapolis?
I wanted to see if there were any threads on the issue of young adults mobbing people in the Chicago area. Also, there have been a few weekends where there have been double digit shooting victims, usually a handful die from their injuries. Been reading about this on Drudge and Second City Cop blog. The cops also make some comments about their pension, and I feel the pension issue for Illinois, California, and a few other states could affect everyone nationally. There have already been a few calls for a central government bailout. Not sure if that call for for equal bailouts for all citizens in all states, or only for a select few whose leaders promised more than they could pay.
INot sure if that call for for equal bailouts for all citizens in all states, or only for a select few whose leaders promised more than they could pay.
No, no, no.
It's not "more than they could pay," it's more than they did pay.
I understand why taxpayers are frustrated with the situation, but you know what - it is our collective fault that our government did not make the annual payments into pension funds that were agreed upon.
As long as we're giving multinational companies like Boeing tens of millions (or more) of tax breaks an dincentives, I don't want to hear one word about how we can't "afford" to honor our pension obligations. FTR, I am not a govt employee.
For those who might care, Crain's has reported on the column that kicked off this thread.
Wow, a blog about a blog? I think the internet just ate itself. When he says the first blog is "drawing a lot of attention," is he referring to this thread? I've not heard nor seen mention of it anywhere else, on or offline.
The writer of the City posting was interviewed on WLS this morning. He seemed much more supportive of Rahm than most of the comments here would suggest...
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