How do you think losing the AAA rating will effect you on a personal level?

[ilovemk76]

But I think that should hold true for every one. I think if you make a promise to a teacher and she retires on that promise, I think it should be kept.

But lets look at all the scenerios. for example my dad and brothers. Older brother went into the Navy at 18 does his 20 years, is now collecting a military pension. Then he gets a job with the post office, next year he'll have done his 20 years with the P.O and collect another full pension. So by the time he's 60 he'll be bringing in close to 80K. Now he's been collecting his navy pension already for almost 20 years and will continue for another 20 years.

My dad was the same way. went into the army at 18, did his 20 years. became a NYC policemen. because he saw action in Korea and Vietnam he got almost 10 years credit on his policemen time (I think this has changed though). So by the time he died at 85 he had been collecting an army pension, a policemen pension plus social security for at least 35 years. I remember him saying that he had been collecting pension longer than most people worked.


Hey that's not sad? I don't want all my friends to think how I do. How absolutely boring is that!!

Think of the things we do agree on.

We both love our country.
We both want our country to be the best it can be.
We both want our kinsmen to be happy and prosperous.
We both think the tax codes need to be revamped
We're both frugal
We both love the lodge.
We both think the world needs more people like Ranger Stan.

Many of those promises were made with false math assumptions (returns of 10% year after year), knowledge by both the unions and government that they were not going to work in 20 year, but done to get reelected and some of them were underfunded when times got bad. As a result those promises cannot be met. It is fairer to make all take a cut now rather than give those taking all the benefits and telling the new one - too bad, so sad.

Bold - This is a great example of what is wrong with the pensions. Both come from the federal government. How can you get two pensions from the same company? (I know the answer - it is a rhetorical question) Add to that one can collect one pension while working to earn another.

How can somebody think they deserve a pension 60% higher than the average family who pays their taxes make? As I have said before, this is unsustainable.

 

[punkin]

Many of those promises were made with false math assumptions (returns of 10% year after year), knowledge by both the unions and government that they were not going to work in 20 year, but done to get reelected and some of them were underfunded when times got bad. As a result those promises cannot be met. It is fairer to make all take a cut now rather than give those taking all the benefits and telling the new one - too bad, so sad.

Bold - This is a great example of what is wrong with the pensions. Both come from the federal government. How can you get two pensions from the same company? (I know the answer - it is a rhetorical question) Add to that one can collect one pension while working to earn another.

How can somebody think they deserve a pension 60% higher than the average family who pays their taxes make? As I have said before, this is unsustainable.

Now that's interesting, because, IME the Unions and the Government actually believed that the good returns would go on forever...just like the majority of the public believed housing prices would rise indefinitely.

 

[ilovemk76]

Now that's interesting, because, IME the Unions and the Government actually believed that the good returns would go on forever...just like the majority of the public believed housing prices would rise indefinitely.

They expected the good times to keep on rolling but they also knew that the numbers did not add up. They put all of their numbers in with a perfect scenario. That is never realistic and never happens.

There is a scenario my financial guy runs that show our net work at $300 million. That is not realistic but if we got a 30% return year after year after year and we lived to be 100 then it could happen. Is that realistic, no, but it is possible in a perfect world. I think that $300 million would would be at the same time as a home is $200 million, a loaf of bread is $10K and the like.

The unions and the government allowed the practice where you used your last three years for your retirement money with OT. Guess who worked all the OT! The people were retiring with a higher pension than their base salary. Then they got free medical (nobody could guess how costly this would be), guaranteed increases and the like.

 

[runwad]

I'm sorry, but comparing postal workers to combat soldiers doesn't cut it for me. The military is doing a more vital, much more dangerous, and apparently much more thankless job. Really disgusted that we would even think of treating our military this way. With all the cuts that could be made it is shameful to even consider that one! And no, I don't even know anyone personally in the military, so it's not that it's a cut for me personally. It's just not right.

:I'm right there with ya, fakereadhed. In this day and age with all the unrest in the world the last place I want cut is the military. We all want to be safe and if we don't offer a good package to outweigh the risk of putting your life on the line everyday who'd want to be in the military anyway? Then we'd have to go back to a draft? I'm sure the country wouldn't be happy if war came to our land and we had no protection. Military should stay as is. Cut waste where you can but those men and women have too important of jobs to not pay them for it.

 

[fkj2]

This economic debacle has been decades in the making, and now we're looking for an overnight fix.

And I'm not just referring to problems here in the US; as another poster noted, her family in Portugal doesn't WANT austerity measures. Who would?
I mean, really, who would want to hear you have to do with less?

For years politicos of both parties have spoken promises with their mouths that they can't cash. Even this latest farce of a discussion over deficit reduction has solved NOTHING. The ONLY reason our Treasury rates remain low is because the US is still perceived by the rest of the world as being credible enough to repay its debts. But, how much of that debt is already owned by the US itself?

Oh sure, the US can print money to pay its various pension obligations, but at what cost? As nearly as I can see, we are purposefully DEVALUING our currency. Does anyone think THAT isn't essentially a pay cut? Everyone pays more for goods and services.

As my dad would have said, this is like shutting the barn door after the horse has gotten out. It's great to say no one's pensions should be cut or curtailed but, IMHO, not realistic. Money comes from somewhere. "The government" is us, the taxpayer. Is it any more "fair" to ask working Americans to sacrifice, when they themselves are in the same cash-strapped boat, to fulfill "promises" to others when they can't provide for their own daily living needs?

I'm with dvcgirl. Older, soon-to-retire Americans need to be grandfathered into their retirement benefits. They also need to recognize that the younger American worker can't bear the burden of supporting us, which is how the system is currently set up. The demographics won't justify it--can't justify it. As for American veterans and the military, I think our military personnel--and their families--make a major sacrifice. I certainly don't think they're overpaid by any stretch of the imagination. My concern with the military is that it's become an industry. We have no business patrolling the world and that's what the US has turned the military into; the world's policeman. We can't support that either. I've noticed, just in the past few weeks, a number of ads and media reports about the high rates of unemployment among former military personnel.

This off-shoring of jobs needs to stop. It's a shame that we invest in stocks of the very companies who then turn around and use those investments to establish production sites in other countries, hire foreign workers and put Americans on unemployment.

Things have changed. Forever.

 

[padawans]

This economic debacle has been decades in the making, and now we're looking for an overnight fix.

And I'm not just referring to problems here in the US; as another poster noted, her family in Portugal doesn't WANT austerity measures. Who would?
I mean, really, who would want to hear you have to do with less?

For years politicos of both parties have spoken promises with their mouths that they can't cash. Even this latest farce of a discussion over deficit reduction has solved NOTHING. The ONLY reason our Treasury rates remain low is because the US is still perceived by the rest of the world as being credible enough to repay its debts. But, how much of that debt is already owned by the US itself?

Oh sure, the US can print money to pay its various pension obligations, but at what cost? As nearly as I can see, we are purposefully DEVALUING our currency. Does anyone think THAT isn't essentially a pay cut? Everyone pays more for goods and services.

As my dad would have said, this is like shutting the barn door after the horse has gotten out. It's great to say no one's pensions should be cut or curtailed but, IMHO, not realistic. Money comes from somewhere. "The government" is us, the taxpayer. Is it any more "fair" to ask working Americans to sacrifice, when they themselves are in the same cash-strapped boat, to fulfill "promises" to others when they can't provide for their own daily living needs?

I'm with dvcgirl. Older, soon-to-retire Americans need to be grandfathered into their retirement benefits. They also need to recognize that the younger American worker can't bear the burden of supporting us, which is how the system is currently set up. The demographics won't justify it--can't justify it. As for American veterans and the military, I think our military personnel--and their families--make a major sacrifice. I certainly don't think they're overpaid by any stretch of the imagination. My concern with the military is that it's become an industry. We have no business patrolling the world and that's what the US has turned the military into; the world's policeman. We can't support that either. I've noticed, just in the past few weeks, a number of ads and media reports about the high rates of unemployment among former military personnel.

This off-shoring of jobs needs to stop. It's a shame that we invest in stocks of the very companies who then turn around and use those investments to establish production sites in other countries, hire foreign workers and put Americans on unemployment.

Things have changed. Forever.

 

[MrsPete]

For starts: Taxes need to go up on the rich, but not on their businesses. The middle class needs a relatively small increase. There is a reported 50% of Americans who don’t pay taxes – those in the 40-50% bracket need to start paying something

What they really need to do is to provide tax incentives that'll encourage the upper-middle class and rich people to keep their businesses here at home. When those rich people are over-taxed here in America, they're going to move their businesses over sease, and THEIR PEOPLE will work instead of OUR PEOPLE. We also need to get back to making goods and exporting them to other countries; we are too dependant on other country's goods, and we're providing too little for the rest of the world.

And I totally agree that EVERYONE needs to pay something towards keeping the government going. No one should get back more than he pays in, and everyone should have some skin in the game.

How can anybody think that doing a job for 20 years should allow one to get 30-40 years of retirement? They need to push the number of years to 35 (an 18 year old would be 53) minimum and then not pay until you turn 65.

Here's the thing you're missing: People who go into the military as a career (not the guy who goes in for four years and calls it quits) accept the lower pay BECAUSE the pension is a part of their total compensation package.

I'm a teacher, and -- from a financial point of view -- we're the same. I would not do my job for JUST the paycheck I receive every month. I could do something else and make more money. It's financially worthwhile because I anticipate having the pension later. And, of course, the pension's kind of a wager: For everyone who retires and collects that pension for 30 years, I'm sure there's someone who only lives 2 years after retirement.

So, finally getting to my long-winded point: If you want to do away with the pension, you have to raise the salary to compensate. You can't just do away with the employee's biggest benefit and say, "Who wants this job now?" It'd essentially be a huge pay cut, and no one would take the job.

Bold - This is a great example of what is wrong with the pensions. Both come from the federal government. How can you get two pensions from the same company? (I know the answer - it is a rhetorical question) Add to that one can collect one pension while working to earn another.

How can somebody think they deserve a pension 60% higher than the average family who pays their taxes make? As I have said before, this is unsustainable.

No, one pension is from the Navy and the other pension is from the Postal Service -- both branches of the federal government. Not the same "company".

The figure out there was 80K. That isn't 60% more than the average family earns.

This economic debacle has been decades in the making, and now we're looking for an overnight fix.

That's true, and we as a society have lost sight of the concept of delayed gratification. This thing has been brewing since the 70s, and it's unrealistic to think we'll "fix it" in 2-3 years or without serious sacrafice.

Also, it's unrealistic to think we're going to go back to the economy that we had in the 90s and early 00s -- it was a falsely inflated economy based upon excessive borrowing and over-spending. We cannot go back to that because 1) it was always unsustainable, and 2) we're still paying off the debt from those years; thus, we cannot take on more debt (well, apparently we CAN, though clearly we should not).

 

[eliza61]

[/SIZE]

What they really need to do is to provide tax incentives that'll encourage the upper-middle class and rich people to keep their businesses here at home. When those rich people are over-taxed here in America, they're going to move their businesses over sease, and THEIR PEOPLE will work instead of OUR PEOPLE. We also need to get back to making goods and exporting them to other countries; we are too dependant on other country's goods, and we're providing too little for the rest of the world.
I'm a teacher, and -- from a financial point of view -- we're the same. I would not do my job for JUST the paycheck I receive every month. I could do something else and make more money. It's financially worthwhile because I anticipate having the pension later. And, of course, the pension's kind of a wager: For everyone who retires and collects that pension for 30 years, I'm sure there's someone who only lives 2 years after retirement.

So, finally getting to my long-winded point: If you want to do away with the pension, you have to raise the salary to compensate. You can't just do away with the employee's biggest benefit and say, "Who wants this job now?" It'd essentially be a huge pay cut, and no one would take the job.No, one pension is from the Navy and the other pension is from the Postal Service -- both branches of the federal government. Not the same "company".

).

Only problem is MsPete, study after study has shown that big businesses move their production overseas not due to taxes but due to salaries.

US has a high coporate tax rate but very few if any of corporations pay that high tax rate due to the loopholes they have. The truth is most corporations do not pay any higher taxes than their European counterparts.

http://www.nytimes.com/2011/05/03/business/economy/03rates.html

Topping out at 35 percent, America’s official corporate income tax rate trails that of only Japan, at 39.5 percent, which has said it plans to lower its rate. It is nearly triple Ireland’s and 10 percentage points higher than in Denmark, Austria or China. To help companies here stay competitive, many executives say, Congress should lower it.

But by taking advantage of myriad breaks and loopholes that other countries generally do not offer, United States corporations pay only slightly more on average than their counterparts in other industrial countries. And some American corporations use aggressive strategies to pay less — often far less — than their competitors abroad and at home. A Government Accountability Office study released in 2008 found that 55 percent of United States companies paid no federal income taxes during at least one year in a seven-year period it studied.

Honeywell, the New Jersey company that makes things as diverse as aerospace components and First Alert smoke detectors, reported in regulatory filings that in the last five years, it paid cash income taxes in the United States and abroad equal to 15 percent of its profits. On Friday, a Honeywell spokeswoman pointed out that the company had since made a large pension contribution, which effectively cut its profits and made its tax rate closer to 22 percent.



That nonsense about us overtaxing major corporations is a fallacy. Now I don't know if this is the case with small business.
That's why I'm become more and more a fan of a flat tax. No more loopholes, no more deductions. No more people getting a bigger tax refund then they put in. every one, no matter what your income, if you have made 10 bucks in a year, yes you need to contribute to the running of this country.

Major corporations moved oversees for one reason and one reason only. Labor cost. We will never, ever compete with a country that allows its workers to be paid $1.50

ps. I'm not shouting I just bolded the interesting part to stand out.

 

[OceanAnnie]

A look at the world's new corporate tax havens

"When President Obama threatened to clamp down on tax dodging, many companies decided to leave the Caribbean. But instead of coming back home, they went to safer havens like Switzerland.

Several of these companies came to a small, quaint medieval town in Switzerland call Zug.

Hans Marti, who heads Zug's economic development office, showed off the nearby snow-covered mountains. But Zug's main selling point isn't a view of the Alps: he told Stahl the taxes are somewhere between 15 and 16 percent.

"And in the United States it's 35 percent," Stahl pointed out.

"I know. It's half price," Marti said...."

"...The population of the town of Zug is 26,000; the number of companies in the area is 30,000 and growing at an average rate of 800 a year. But many are no more than mailboxes....".

"Transocean owned the drilling rig involved in the giant BP oil spill. They moved to Zug two years ago.

"I'm not sure they even moved that much. They have about 1,300 employees still in the Houston area. They have 12 or 13 in Switzerland," Doggett told Stahl.

"And yet they claim that they're headquartered over there," Stahl remarked.

"They claim they're Swiss. And they claim they're Swiss for tax purposes. And by doing that, by renouncing their American citizenship, they've saved about $2 billion in taxes," Doggett explained.

"Well, if you have a 35 percent rate in the United States and, for example, a 12.5 percent rate in Ireland, there's a incentive to move your factory to Ireland," he explained.

"Six hundred American companies are in Ireland and they employ 100,000 people," Stahl pointed out. "Those are jobs that aren't here. And they moved to Ireland because of taxes."

"The U.S. Treasury in effect is subsidizing investment in Ireland," Sullivan said.

"Why isn't everybody in Ireland if it's that great?" Stahl asked.

"Almost everybody is in Ireland," Sullivan said. "All the pharmaceutical companies, all the high tech companies. You're stupid if you're not in Ireland," he replied.

http://www.cbsnews.com/stories/2011/03/25/60minutes/main20046867.shtml

 

[OceanAnnie]

10 Big Businesses That Have Moved Their Headquarters Abroad to Pay Less U.S. Taxes

http://www.focus.com/fyi/10-big-businesses-that-have-moved-abroad/

 

[Muushka]

Even if you just looked at the states here. The ones with high tax rates have corperations leaving for states that have lower rates. Same thing goes for personal taxes within the states. The ones with high tax rates are losing its residents in droves. They are going to states with lower taxes.

 

[Princesca]

Count me in as a huge fan of the flat tax! Getting rid of the IRS, for the most part, would be a dream come true. Throwing out all the IRS regulations would be even dreamier. Even with the flat tax exemption per household member, by my math anyway, according to the flat tax proposal that I read, someone earning $20k would still net pay, but not much. I do think it's important to have shared sacrifice, where everyone pays at least a little something. In this case, I do think the gesture is important, and it helps guard against a sense of entitlement.

I think my blood pressure goes up like 100 pts every April 15 because of how ridiculous the tax system is now. I mean, the Treasurer of the country can't do it right! How the heck is the average person supposed to?

 

[Princesca]

Another huge part of the drain is the high taxes on repatriation of foreign earnings. I used to work for a company that held a lot of its cash offshore because it was expensive to bring it back for use here. At one point the government was considering radically dropping that tax for a period, but I don't think they ever did. It was called something like the Homeland Investment Act. Or something. I think that would be a good idea.

So in that case, I know for a fact, because I sat in on the discussions, that US taxes were hindering American companies using their foreign earnings back home. And the more earnings you keep overseas, potentially the more people you will end up hiring in those subsidiary areas, as opposed to here on US soil

 

[Jeff_G]

I don’t think companies should have to pay any income tax! What can a company do with earning only about three things; pay its employees, invest capital back into the company and save / invest the money. So the money is either leaving the company to its employees or its making the company financially stronger. Then lets switch over to a individual consumption tax / sales tax, which would still be progressive in nature. Enact import tariffs on foreign goods and then get out of the way! Let the economy cycle like it needs to…

 

[Muushka]

I am more in favor of the Fair Tax. I believe it really is more fair. It addresses the spending rather than earning.

For example, there is a huge amount of taxes that are not paid due to the fact that people are either earning it illegally (prostitution, drugs...). They pay no income tax. People who work 'under the table' don't pay any income tax (obviously).

More tax on the rich? No problem. They only pay 15% on capital gains. The old complaint that Warren Buffet pays a lower tax RATE than his secretary. Screamed rate because people often forget that he actually pays a ton in taxes more than the secretary, but I digress.

If it were a Fair Tax, the wealthy would pay a lot more in tax because it would be based on what they spend.

With the current tax system, it penalizes people for earning more money. And occasionally, politically, demonized.

 

[MrsPete]

Count me in as a huge fan of the flat tax! Getting rid of the IRS, for the most part, would be a dream come true.

A flat tax makes so much sense to me that I simply can't understand the nay-sayers' complaints. I don't think I'd pay any less with a flat tax (because I think I'm right there in the middle-middle-middle spot), but I would feel better knowing that everyone (from the high school part-timer to the highest-paid CEO) paid a portion, an equal-percentage portion.

And how much simpler would it be!

 

[ilovemk76]

What they really need to do is to provide tax incentives that'll encourage the upper-middle class and rich people to keep their businesses here at home. When those rich people are over-taxed here in America, they're going to move their businesses over sease, and THEIR PEOPLE will work instead of OUR PEOPLE. We also need to get back to making goods and exporting them to other countries; we are too dependant on other country's goods, and we're providing too little for the rest of the world.

And I totally agree that EVERYONE needs to pay something towards keeping the government going. No one should get back more than he pays in, and everyone should have some skin in the game. Here's the thing you're missing: People who go into the military as a career (not the guy who goes in for four years and calls it quits) accept the lower pay BECAUSE the pension is a part of their total compensation package.

I'm a teacher, and -- from a financial point of view -- we're the same. I would not do my job for JUST the paycheck I receive every month. I could do something else and make more money. It's financially worthwhile because I anticipate having the pension later. And, of course, the pension's kind of a wager: For everyone who retires and collects that pension for 30 years, I'm sure there's someone who only lives 2 years after retirement.

So, finally getting to my long-winded point: If you want to do away with the pension, you have to raise the salary to compensate. You can't just do away with the employee's biggest benefit and say, "Who wants this job now?" It'd essentially be a huge pay cut, and no one would take the job.No, one pension is from the Navy and the other pension is from the Postal Service -- both branches of the federal government. Not the same "company".

The figure out there was 80K. That isn't 60% more than the average family earns. That's true, and we as a society have lost sight of the concept of delayed gratification. This thing has been brewing since the 70s, and it's unrealistic to think we'll "fix it" in 2-3 years or without serious sacrafice.

Also, it's unrealistic to think we're going to go back to the economy that we had in the 90s and early 00s -- it was a falsely inflated economy based upon excessive borrowing and over-spending. We cannot go back to that because 1) it was always unsustainable, and 2) we're still paying off the debt from those years; thus, we cannot take on more debt (well, apparently we CAN, though clearly we should not).

Taxpayers pay for both and both are budgeted by Congress so they are the same company.

$80K is 60% more than $50K, which is what the average family makes.

 

[fakereadhed]

I am more in favor of the Fair Tax. I believe it really is more fair. It addresses the spending rather than earning.

For example, there is a huge amount of taxes that are not paid due to the fact that people are either earning it illegally (prostitution, drugs...). They pay no income tax. People who work 'under the table' don't pay any income tax (obviously).

More tax on the rich? No problem. They only pay 15% on capital gains. The old complaint that Warren Buffet pays a lower tax RATE than his secretary. Screamed rate because people often forget that he actually pays a ton in taxes more than the secretary, but I digress.

If it were a Fair Tax, the wealthy would pay a lot more in tax because it would be based on what they spend.

With the current tax system, it penalizes people for earning more money. And occasionally, politically, demonized.

The biggest problem I see with the fair tax is that it has the potential to adversely affect our economic growth. Why buy new if you have to pay taxes?

I like the idea of flat tax. That seems like it should be called fair tax to me, and fair tax should be called national sales tax.

 

[nunzia]

Taxpayers pay for both and both are budgeted by Congress so they are the same company.

$80K is 60% more than $50K, which is what the average family makes.

Right..and not to start a war, but yes..those who had the good pension plans because it was part of their 'pay' since they made low salaries used to be the case..that argument is largely gone since public/military are much more in line with private sector now. When I was in the AF pay was truley pathetic..not so bad now, as well as teaching salaries..IMO.

 

[MrsPete]

Right..and not to start a war, but yes..those who had the good pension plans because it was part of their 'pay' since they made low salaries used to be the case..that argument is largely gone since public/military are much more in line with private sector now. When I was in the AF pay was truley pathetic..not so bad now, as well as teaching salaries..IMO.

I'm not all that familiar with military pay scales, but I do know teacher salaries. A few areas of the country pay $$$$$; thus, people get the idea that all teachers make that much. I personally am about to begin my 20th year in the classroom (so I'm nearing the top of my state's payscale) and earn about 42K/year. This is fairly average for MOST places in America. That's slightly less than I was earning 3 years ago, and it's less than the average professional with two college degrees and two decades of experience.

If not for my pension, I would not be teaching. It wouldn't be worth the monthly paycheck.