Saturday, October 22, 2005

We Don't Need No Stinkin Pensions

Corporations have not been putting appropriate funds into pension plans. Now, as the baby boomers come due to retire we have a problem coming and its going to be huge. The executives made them selves look good and got their bonuses (pronounced bone-us) by effectively stealing from the pension fund. The government, which insures these pensions, has no regulatory agency with teeth to prevent this from happening. So, soon its going to be the S&L crisis all over again.

"We don’t pay taxes. Only the little people pay taxes."
Leona Helmsley, criminal..

Let me a see a show of hands, who is tired of paying the rich with tax dollars that would be better spent rebuilding our infrastructure, teaching our children, providing research for new technologies, defending our nation or caring for the needy? When the executives steal, they eventually steal from us, the tax payers. Ah, and let us not forget that the richest American now have the least tax burden. When millions of working people suddenly discover they have been screwed by these firm, let us hope that they organize into a political movement so that we can start to roll back the time of two Americas.

- Human Toll of a Pension Default
- Is There a US Pension Crisis?
- Pension Pains


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questioning reader said...

Hmm, I have 2 questions:
1. When you say "who is tired of paying the rich with tax dollars that would be better spent...", do you mean that they are being paid by NOT collecting more taxes from them? If so, can your company start "paying" you by not taking money from your saving account?
2. When you say "let us not forget that the richest American now have the least tax burden", do you mean that the percentage that they pay of their income is lower than the percentage that less wealthy Americans? Because I believe I have read that the largest percentage of ALL tax dollars collected comes from the top 1% of tax payers.
If I am mistaken, please let me know. I am reciting information that I have heard and would like to hear if you disagree with know how to reach me.

Kahnstipation said...

Thanks for the comments. Here are my responses:
1. "who is tired of paying the rich with tax dollars..." By this I mean that government money is diverted from important projects to sweet heart deals that benefit certain friend of those in power. From the $9000 wrench during the Regan era to the pipe line games in Central Asia under Clinton to the Halliburton no bid deals in Iraq and the Gulf Coast under Bush it keeps on happening. In addition to our right diversion, we also had at large portions of the federal budget that represent corporate welfare. According to CNN the government spends $125 billion per year for corporate welfare.

2. Who pays the taxes. According to the Treasury The top 1 percent pays 33.9 percenter of all individual income tax and the top 5 percent paid 53.3 percent when their reported income accounted for 32.0 percent of total individual income. With these statistics one could make the case that the rich are paying their far share.

The problem with these numbers is that the leave out several factors and that they are not accurate (if the Congressional Budget Office is to be believed). According to a report by the Congressional Budget Office the top one percent of income earners paid 21.1 percent of the income taxes. When we look at state and local taxes, the impact of this group on the total revenue is diminished. When we look at income, the wage earner and the billionaire have different types of income. For the wage earner income is easily calculated. For any one at the executive level, the wage is part of a very complicated compensation package made up of stock options, bonuses, low interest/no interest loans and a variety of perks (company car, fuel expenses paid for by the company etc).

So, I am not sure that gap between the top income earners and the rest of us is accurately capture by the federal government. If it it were if the top 1 percent is paying 21.1 percent, that means that the rest of us are paying 78.9 percent. If we look at the distribution of incomes, I believe that who bears the greatest weight of the tax burden will be the middle class and not the rich.

So, it depends on the following:
a) who's numbers do you trust
b) how are those numbers comprised and do they capture full compensation and full payout in terms of taxes

I do not trust the Bush administration who seems to have a vested interest in a specific interpretation of the numbers. I am more likely to trust the CBO which doesn't seem to have an agenda and is also Republican controlled.