10:35 pm, April 19, 2014

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  • You know you're in trouble
    contrarian
    When your friends desert you. Only a little surprised on the Dec 24th issue. But I'm not worried about me.
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  • fiscal cliff deal? weak at best
    Rob
    It sounds like a deal is imminent. Obama is going to get his long sought after tax increase on the evil rich and the GOP is going to settle on very modest (weak) budget cuts. The significant reforms in entitlements, which is the only way to solve the long term fiscal problems this country faces, are not going to happen. So, after the pending deal is inked by Obama and taxes are finally raised on those evil rich Americans what we'll discover is our budget deficit each year for the next 10 years will still be over $1 trillion. What a joke!
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  • Fiscal cliff
    Moderate
    First to Paul M Tou make light of the inflation difference. You are not retired so you have no clue. One year makes little difference. However, the effect is cumulative over 20, 340, or 40 years. That makes a bif difference. To Rob, IOt appears you are looking for huge cuts in what you call entitlements and little increase in taxes to your evil rich brethren. The increase in the marginal rate, as far as I can tell, is about 3 or 4%. I do not know what will happen to capital gains or dividends, both larger for the wealthy than the rest of the population. It appears some of the rest will come from federal retirees. You have no idea where the rest will come from. So why predict?
    worker
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  • Paul M at the IRS doesn;t seem to get it
    Liam Skye
    Paul M, the change absolutely IS retroactive. It will reduce the total compensation of every single current federal and military employee. The employees can not turn back the clock and change their retirement plans and contributions but the government fully intends to renege on its end of the deal AFTER the employees have held up their end. When someone dedicates their entire working career to serving the nation, the government is morally, if not legall;y, obligated to pay them in full according to the deals that were in place during that working career.
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  • ever heard of bankruptcy
    Rob
    Folks really need to pay closer attention to what's going on around the world. Governments all around the globe (including ours) have made too many promises to too many people that it can't keep. I get the whole moral argument angle, but bankruptcy trumps it all. And despite what most people believe you can't tax your way out of it. Once you reach a certain tax rate you actually decrease revenues.
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  • the Laffer curve *again*?
    Jerry A.
    Rob, The Laffer curve "too high taxes lower revenues" and it's laughable corollary "tax cuts raise revenues" have been put out by the GOP for the past 30+ years as a way to get elected without a shred of evidence. Yes, it sounds logical in theory with no other economic factors involved, but in reality no one has ever shown where is that peak point of revenue for a certain tax rate. In fact, the Congressional Research Service [http://www.ombwatch.org/node/12273 and http://news.firedoglake.com/2012/12/14/crs-resurrects-report-showing-no-correlation-between-low-tax-rates-on-the-wealthy-and-economic-growth/] has shown that all of the GOP tax cuts over the last 30 years have done nothing to raise revenue, nothing to stimulate the economy, nothing to make more jobs, nothing except let the already rich keep more money. In other words, you are absolutely wrong about that. What higher taxes will do is cut the deficit and pay off the national debt. Taxes will pay for the expenses caused by the GOP's two unfunded off-the-books wars, "temporary" 10-year tax cuts, and Medicare Part D. That's called "being responsible".
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  • You're too funny Jerry A.
    Rob
    Let me get this straight. The Dems are going to take the revenue from the tax increase and pay down the debt? Was that a tongue in cheek comment? Any revenue raised from the tax increase will be used for additional spending a.k.a investment. Please wake up!
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  • I don't think you understand the debt
    cubedweller
    Our national debt isn't a credit card. You can't "pay it down" whenever you want to. We only pay it down when our national investors' treasury securities mature. Increasing revenue does, however, reduce the deficit, which requires that we issue fewer securities. So, yes, more revenue does decrease the debt over time, because the size of the debt shrinks as deficits shrink.
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  • Not Quite, So!
    ben
    Not quite, the Austrian and Chicago schools of economics argue that the limits for income tax is between 25 and 30 percent, respectively, before revenue declines. Per OMB, in constant 2005, dollars, the Bush tax cut resulted in $4.6 trillion more in revenue, than the previous 8 years under Clinton. The Reagan tax cuts yielded $2.94 trillion more in revenue, than the previous 8 years. The tax cuts requested by JFK, but passed by LBJ in 1964 yielded $522.2 billion more than the preceding 8 years.
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  • Not quite so Ben.
    Moderate
    Isn't the Chicago Group run by Milton Freedman, a right of center politician? Sorry, I do not buy their comments. Amnd where did the Bush and Reagan tax cuts go? To the wealthy of course. There werte comments in the 80's about how the wealthy were better off, but the rest of the country was not. And do not compare the stagflation years of the 70's to anything in the 80's. The 70's were a sick joke and the 80's helped the wealthy. Give credit to JFK. However the Eisenhower years were marked by, I believe 3 recessions. Comparing recession years to prosperity years means nothing.
    worker
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  • Taxes Are For Revenue
    ben
    Taxes are for revenue to run the government. The wealthy got cuts, but contributed more revenue to the Treasury, than before. Raising tax rates to punish the wealthy, but reduce revenue is illogical -- cutting nose to spite face.
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  • Wealthy should pay their fair share
    Moderate
    Taxes are not just for revenue. They affect policies as well. See mortgage interest deduction to encourage home ownership and the research credit to encourage research for better products. It is illogical to support Reagan's policies, for example, when it just encouraged a wider gap between the wealthy and others who did not benefit. Additionally, how much of the Clinton years were down years? This is asked because you compared the Bush years to the Clinton years. And who benefitted from the Bush tax cuts? We are not punishing the wealthy. They should pay their fair share.
    worker
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  • You must have forgotten to read my post
    Liam Skye
    Are you really attempting to reply to my post? Not a single point you made is relevant. I agree that over taxation can stifle economic growth, but nothing stifles economic growth as powerfully as suppressing demand by reducing the disposable income of those who can no longer do anything to increase it.
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  • Chained COLA
    Bud
    The chained COLA and current COLA computations are far below the true inflation rate.The goal years ago when COLA was implemented was to keep pace with real inflation rises.I doubt if Paul M would want his annual raise geared to the chained COLA for the next 10 years.Yes it's better thaan the current pay freeze but it will be far less than what the feds will receive over 10 years.As for Social Security,eliminate the current ceiling of about $110k and make people pay FICA on every dollar they earn.
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  • To Bud
    Moderate
    I agree with you about the inflation. I am not sure about the social security issue. See previous comments about this. Social security is paid out based on pay ins. The rate of payout you are writing about is 15%. Would the government pay out more on the extra pay ins because the wealthy would get higher benefits when they retire? Consider also the present value of money. We need a statistician for that answer. I do not know.
    worker
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  • Paul M at the IRS
    jayne d
    Geez.......If the COLA is projected to be .057% and you apply the new rules , this .057% -.3 = (-0.243%) a negative number not ..054% which he then says is insignificant. This guy is working at the IRS......heaven help the tax payer he audits or am I wrong?
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  • You are wrong
    Joe
    To be clearer he could have stated that a 5.7% COLA would be reduced to 5.4% - the difference being 0.3%. The 0.3% difference compounded over 30 years is 9.4%. A small price to pay to avert fiscal calamity.
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  • Paul M at the IRS
    pcfriar66
    Paul M, I think you are wrong. If the inflation were low enough for an unchained COLA of .057, the chained COLA would be a reduction of .017. (roughly 70% of the unchained COLA). The reduction of .3 is based on an unchained COLA of 3%. In fact, that would be a reduction of 10% from the unchained COLA, in which case the chained COLA would be .0057, leaving a chained COLA of .0513. These reductions would be insignificant only if the unchained COLA is and remains miniscule, which in the long run will not be the case. We WILL be ultimaely screwed.
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  • no "clawbacks" of COLA's already received.
    pcfriar66
    Liam, you are correct that it will apply to anyone regardless of their number of years of prior service. However, I think Paul M. is referring to asking for all the COLA's for the past 10 years recomputed and the differences "clawed back". That will not happen.
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  • Diet COLAs
    smooth811
    In this whole issue of reforming Social Security among other "entitlements," there is a measure that is not spoken of which, if employed, would eliminate the need for diet COLAs, increase in eligibility age, or decrease in benefits. That simple measure is to increase the employee (but not employer) contribution to Social Security. Up to $50K in salary, have no change in employer/employee contribution. Above $50K to $75K in salary, increase the employee contribution by some percentage. Above $75K to the annual limit, increase once more the employee contribution by some percentage. This will well fund Social Security and eliminate the need for diet COLAs, increase in eligibility age, or decrease in benefits. The reason I would make no change to the employer contribution is to not increase employer costs which might result in loss of jobs.
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  • Please Do Not Raise My FICA Taxes
    FederalEmployee
    I pay 7.62% FICA tax, 8% state income tax, and part of my income fell in the 28% bracket last year. After paying for my health insurance and 401K contributions, less than 50% of my pay was left for food, clothing, shelter, charitable contributions, personal savings and a little fun. I certainly do not want my FICA taxes increased. One suggestion I have for saving Social Security and Medicare is doing away with the provision that allows a woman who has never paid into the system, or who would not otherwise qualify, to receive benefits as long as she was married at least 10 years to a man who does qualify. Benefits should only be available for those of us who pay into the system. Please, no emails on "family values" and how raising children and keeping the house clean is a job in itself. I am not denying that raising children is a difficult job, expecially in today's society, and housework is no fun - especially if you work all week and have to cook and clean on top of your outside job. However, life is all about choices, although far too many Americans do not want to take responsibility for the choices they have made. If one chooses not to work and not to pay FICA taxes, then one should not be afforded the same benefits as one who works his/her entire life. I see this as no different from any other choice one makes that affects earning potential. One can choose to go to college or trade school, or one can choose not to pursue higher education. And no - I am not a "conservative" or a "liberal". I do not, nor will I ever, belong to a political party until one is formed that espouses my personal beliefs of personal responsibility and accountability, the pooling of funds for the common good in a fair and equitable manner (unlike the tax code under which we currently operate) and assistance to those who are truly unable to support themselves due to physical and mental disability. I think I may be waiting for a very long time.
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  • I don't understand...
    BMoreFeds
    How do you have less than 50% of your pay? If the top end of your income is getting hit @ 28% - you are likely making over 100k. I'm going to make an assumption that you itemize and have a house...I'm going to assume that your actual federal tax rate is 15%. So 7.62% + 8% + 15% = 30.62%...Federal Health care for a family plan runs about $3500-4000/yr depending on the plan. So if you make 100k, health care is another 3.5% for a total of around 34% before TSP. Where's the rest of your money? Life is about choices - and you don't have to put over 15% in your IRA - that's your choice...If you want a little more play money - you can save less...
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  • Choices
    FederalEmployee
    The point of my comment, BMoreFeds, was that I do not want my FICA taxes to go up. Is it the fact that I make over 100K that raised your ire? Your comments are insulting and uncalled for. You are absolutely correct that life is all about choices. You are quite incorrect about my effective federal tax rate. I choose to lease my abode. I am therefore prohibited by law from deducting the portion of my rent that covers the owner's property taxes and mortgage interest. I receive no credits for having children, for buying a hybrid vehicle or for putting solar panels in the roof. As a single college educated professional who has chosen to work very hard to get to this point in my career,I receive few of the tax expenditures and credits allowed by the Title 26 behemoth. Again, these are all my choices. You rudely ask "where's the rest of your money?" I owe you no explanation, however I just pulled up pay period 24's E&L sttement and was delighted to see that I took home 52.15% of my gross pay. Two years ago, when I elected to put several thousand in my flexible spending account due to surgery I had to have, my take-home was under 50%. So, for your edification, here are the cold hard numbers: Retirement .80%, TSP - not an IRA - 16.04%, OASDI 4.06% - note that OASDI is not payable on the portion of my pay that goes into my TSP, or health insurance premiums or the FSAFEDS account, FIT - 15.93%, SIT - 5.96%, FEHBA - 2.1%, union dues - .42%, FSA - 1.13%, and HITS - 1.4%. That totals 47.85%. You are absolutely correct, BMoreFeds, that other than the taxes, FERS and FICA, everything else is my choice. I could be stupid and not properly plan for my retirement. I could drop out of the union, forgo health insurance and can the flexible spending account. So BMoreFeds, has your question been answered? Do you now understand where the rest of my money goes? Again, the point of my earlier post was to express my opinion that raising the FICA tax rate would be painful, expecially for lower income people. Do not begrudge higher graded employees. You have no idea what I do, the skills, education and expertise required, nor what I have gone through to get to where I now am.
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  • No particular ire...
    BMoreFeds
    Why would you assume that I'm a lower grade employee than yourself? Nothing about your salary raised my ire...I'm a high grade employee in the DC locality who makes a very good salary. The only thing I took objection to was the way it came across(to me) that you were complaining that your take home pay was less than 50% while then talking about life choices...I knew that you if your take home pay was that low that you were dumping a lot into your TSP, which is a good thing...and you are in FERS - while certainly not CSRS, it's still a very good pension for those of us in the higher grades. I apologize for my rant earlier, I could lie and say it was stress of looming sequestration but it wasn't - I agree that I came across as a bit of an @#$ and didn't add anything productive to the discussion.
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  • FICA Tax raise
    Moderate
    I heard (cannot prove) that if the employer and employee each pay an additional 1% for FICA, it will extend the life of social security by about 75 years. perhaps retirement age should be raised to 70. Is grandfathering in order? Retirement age is now 67 or 68 at a certain age level. I will agree with you that you must put much money into your TSP as your retirement plan (FERS) is much worse than CSRS. Plus you get a diet COLA as it is.
    worker
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • FICA Tax raise
    Moderate
    I heard (cannot prove) that if the employer and employee each pay an additional 1% for FICA, it will extend the life of social security by about 75 years. perhaps retirement age should be raised to 70. Is grandfathering in order? Retirement age is now 67 or 68 at a certain age level. I will agree with you that you must put much money into your TSP as your retirement plan (FERS) is much worse than CSRS. Plus you get a diet COLA as it is.
    worker
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • FICA Tax raise
    Moderate
    I heard (cannot prove) that if the employer and employee each pay an additional 1% for FICA, it will extend the life of social security by about 75 years. perhaps retirement age should be raised to 70. Is grandfathering in order? Retirement age is now 67 or 68 at a certain age level. I will agree with you that you must put much money into your TSP as your retirement plan (FERS) is much worse than CSRS. Plus you get a diet COLA as it is.
    worker
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  • FICA Tax raise  (Flagged as Abuse)
    Moderate
    Show/Hide Message
    worker
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  • FICA Tax raise
    Moderate
    I heard (cannot prove) that if the employer and employee each pay an additional 1% for FICA, it will extend the life of social security by about 75 years. perhaps retirement age should be raised to 70. Is grandfathering in order? Retirement age is now 67 or 68 at a certain age level. I will agree with you that you must put much money into your TSP as your retirement plan (FERS) is much worse than CSRS. Plus you get a diet COLA as it is.
    worker
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • FICA Tax raise
    Moderate
    I heard (cannot prove) that if the employer and employee each pay an additional 1% for FICA, it will extend the life of social security by about 75 years. perhaps retirement age should be raised to 70. Is grandfathering in order? Retirement age is now 67 or 68 at a certain age level. I will agree with you that you must put much money into your TSP as your retirement plan (FERS) is much worse than CSRS. Plus you get a diet COLA as it is.
    worker
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Chained COLA scam
    M_Onger
    it is a mathematical scheme to "let them eat cake"!
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  • Chained Cola
    Bud
    Monger-Best comment for this column.So very true.And lets nominate Pelosi as Marie Antoinette since Boehner's latest proposal is the same one Nancy proposed earlier this year.
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