3:18 pm, March 5, 2015

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  • Can't Keep On Going
    ben
    The truth is that the government can't keep up its present level of taxation and spending, without disastrous results. We can see the effects of overspending and taxation in Europe and Japan. Only Germany and, to a lesser extent, the UK, are major economic nations still maintaining their heads above water. The UK is living upon the Thatcher legacy, without which she would be in the same shape as the PIGS. The change to a chained CPI will cause a reduction of .25 to .3 percent in annual raises. No matter who is president in 2017, he must be a deficit hawk, else the US will emulate France and the PIGS -- extreme austerity and a fight over the last scraps to tax.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Southern Europe's problem...
    Jerry A.
    is tax evasion. Those governments are not collecting the taxes they are due. The Tea Baggers, with sponsorship from the 1%, are bringing this home to the USA. Why else cut the IRS budget? Why else keep huge tax loopholes for the top income earners? Why else this non-stop bleating for more tax cuts when we are a 60 year low for taxes? We did fine with a much higher top tax rate in the 1950's and 1960's.
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  • Southern Europe Is Incompetent in Taxing and Spending
    ben
    The PIGS are simultaneously incompetent in tax collection and spending. All knew their disastrous spending levels and did nothing to expand tax collection, or address overspending. Greece cooked the books to show the EU their position was much better than actual. Spain was keeping its head above water until the left wing took over and sent spending thru the roof. The UK is living off the remains of the Thatcher revisions. If, not for that, she'd be in the dumper with the rest. The lower tax rates yielded the largest increase in revenue in history. So, kill the goose that laid the golden eggs. The tax rates were much higher, but the loopholes were much bigger. Companies could pay upper management for their suits, cars, make low interest loans for their homes, huge entertainment expense accounts. Then, write if off. Note all the luxury in Madmen. It was mostly write offs. The JFK/LBJ tax cuts yielded more revenue.
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  • Tax evasion
    Moderate
    Again, you use examples, but you forget that these countries did not enforce their tax laws. Too much tax evasion.
    worker
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  • Of course examples
    ben
    Of course, I use examples. They best explain the problem. Two of the four PIGS (Greece and Italy) had tax evasion problems. Spain and Portugal suffered more from over priced real estate and a corresponding drop in value much like the US. Greece and Italy knowingly kept their spending rates high, even when they knew the taxes weren't coming in.
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  • Again enforcement . High rate of taxation?
    Moderate
    Why weren't the taxes coming in? Tax evasion? Lack of enforcement. By the way, tax rates have dropped from the highest level of 91% to 39.6%. And you compalain about the rate of taxation?
    worker
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  • Again, Only Two
    ben
    Only two of the nations, Italy and Greece, have high tax evasion histories. As I explained, the other two -- Spain and Portugal suffered a real estate bubble, like ours. Ireland had one as well. The EU's next problem is when, not if, France defaults, or nears default and requires assistance. As I explained, and you apparently failed to understand, was that the tax shelters and loopholes were much larger and prolific under the higher levels of taxation. Under JFK/LBJ and later Reagan, closing of those loopholes and shelters was part of the deal. Few paid those high rates. Also, may sheltered their investments in tax free munies and state bonds. Released from the higher rates money flowed into the economy and tax revenue increased as rated dropped.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Again enforcement
    Moderate
    Actually, the illegal shelters were being attacked prior to Reagan. As far as under LBJ and KFK, I cannot tell because I was not working then. Eliminating the illegal shelters was not part of any deal. I am not sure what loop holes you are writing about so I cannot comment on this. Were they economic incentives (part of the reason for the code) or just illegal items being deducted?---So Spain etc had greedy bankers who wrote improper loans? How is that relevant? They still need to enforce their tax laws. And enforce banking rules.
    worker
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  • Shelters Weren't Illegal
    ben
    If you read my above post, you'd see I stated the elimination of loopholes and shelters begin under JFK/LBJ as they reduced the tax rates. The tax shelters weren't illegal, merely inefficient. In the 1950s, a doctor who earning $50,000 ,through his medical practice, could reduce his taxable income to zero with $50,000 in paper losses or depreciation from property he owned through a real-estate investment partnership. Huge numbers of professionals signed up for all kinds of money-losing schemes. Today, a doctor earning $500,000 can deduct a maximum of $3,000 from his taxable income, no matter how large the loss. Loop holes for corporations allowed CEOs to live a lavish life style on the company's dime. Suits and cars could be paid by companies, very low interest loans for homes, lavish entertainment allowances, vacations, country club dues, all tax write offs. Envy the nice lifestyle in Madmen, the drinking and parties -- all corporate write offs.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Didn't read for comprehension?
    ben
    You stated "So Spain etc had greedy bankers who wrote improper loans? How is that relevant? They still need to enforce their tax laws." I plainly wrote that Spain did enforce tax laws. As to bank loans, that happened in the US, as well, and the main cause of our current troubles.
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  • Chained CPI
    RAH
    As a survivor, when I find a product that I like and the price goes up, I pay the higher price. I do not look for less quality because of the price. I wonder how many other retirees, survivors do the same thing. I am lucky I can afford to do this and know that there are many who can't. I just get tired of Washington thinking we all look for lesser price goods when the costs go up.
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  • Compounding Effect of 1985 COLA Freeze
    Carter Hired Fed
    I'm constantly amazed that everyone has forgotten how much money the government is still saving as a result of Reagan freezing salary and social security adjustments in January 1986. Factor in three more years of pay freezes this decade and a number of feds are looking at a HIGH 7, not HIGH 3. The US Government is starting to sound like a certain religious institution that always cried poor. There was 1.5 TRILLION for two wars, tax "relief" for those who did not need it and a $450 BILLION prescription plan. I'm tired of hearing there's no money. Federal pay was supposed to match the private sector's in 2002. That was 11 years ago. Where is the worker/union outrage at this injustice?
    Carter Hired Fed
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  • Real Costs and Solution
    ben
    So, the wars equal $85 to $90 billion annually, which are declining. Medicare Part D, should have been funded, is presently running about $65 billion annually and will rise to about $80 billion annually. Still, but a small part of the $1 trillion annual deficits since 2009. Instead of the 15 cent per pack tax increase on cigarettes funding a pre-K program, which studies show will not add significantly to a child's learning, apply the revenue to Part D.
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  • "...the wars equal $85 to $90 billion annually, which are declining"?
    FERS Fed
    Dream on. Parse the numbers any way you want, but the country will be paying the costs of the Bush Administration's wars in Iraq and Afghanistan for generations to come. ..... Almost 150 years later, the USG is still paying Civil War pensions, for pete's sake. Source: http://www.usnews.com/news/blogs/washington-whispers/2012/02/09/us-government-still-pays-two-civil-war-pensions
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  • But, Will Decline
    ben
    Yes, costs will continue, but at a vastly declining rate. The wars weren't personnel intensive like Viet Nam.
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  • George's depression
    Moderate
    Thank your friends George Bush and the Republican party for the depression that caused our increased deficits. Hopefully, Obama will bring the country back to normal
    worker
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  • NO!
    ben
    The recession may be traced to policies implemented by Clinton. Bush originally agreed with these policies, but tried to make changes that were rejected by congress. There I a Youtube video of Barney Frank insisting that Fannie/Freddie were fine, while holding an audit report that stated just the opposite. As a retired auditor, I especially resented that. Obama's policies can only drive the economy deeper in the hole and prolong the agony.
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  • No, again
    Linbob
    It started with Reagan. He favored supply side economics (voodoo, as George HW Bush called it - and he was right). Sorry, if there is no demand, what good is the supply. What a incredible waste that we are now reaping the detriments of. Supply side economics - a monumental failure.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Where have you been?
    ben
    Under Reagan, GDP went from a -.275% in 1980 to 4.11% in 1988. Unemployment went from 7.2% in 1980 to 5.3% in 1988. Plus, he ended the runaway inflation that plagued the US since Nixon. There is no way Reagan's actions contributed to the present condition. Such results as he produced wouldn't end the debt crisis, but would reduce it to a manageable size.
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  • I have been responding to radical right propaganda
    Moderate
    First, the idea may have started with Clinton, but went out of control with Bush. And what changes did Bush recommend? You mau have a biased utube of Barney Frank, but the Democrats did not control Congress until 2007, too late to do anything about Bush's follies. And how do you know what he was holding?---And yes. Bush Reagan did bring down runaway inflation, but at what cost to the middle class? I was no better off in 1988 than 1980. And what kind of jobs did the people get to reduce unemployment from 7.2% to 5.3% after hitting 10% in between? How many were hamburger flipper or other minimum wage jobs vs good union jobs?
    worker
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  • No radical right winger.
    ben
    Calling names is a tactic learned in the third grade. Most of us out grow it by the fifth grade. The Democrats controlled the Senate, which is half of Congress, for 4 of the 8 years Bush was in office. Inflation is a thief that harms the medium and lower incomes. It destroys saving and pension benefits, especially the elderly on fixed incomes. I'm sorry you did no better over the 8 years, I did quite well in the civil service, as I assume you were. Did you request or pay for advanced training in your field? As the percentage of workers paid minimum wage, or below, usually varies from about 5 to 6 percent of the whole, I'd assume not many. The percentage of union workers has dropped for decades as workers see little advantage to membership, except for a very few unions that assumed advanced training for their members.
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  • Are you sure?
    Moderate
    Perhaps your comment about Barney Frank is the radical right propaganda. Perhaps you need to advance beyond the third grade. Yes, inflation is deadly. And so is unemployment without hope of a decent job. And I am not the only one who did not do well under Reagan. Check out the stats for the non wealthy under Reagan and then the wealthy. It is not pretty. I am well trained and technically pretty decent. How about the rest of the workers who took large pay cuts because of Reagan's economic policies. 4 of 8 years the Dems controlled the Senate? Which years and by what percentage?
    worker
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  • Changes Bush Recommended
    ben
    While a conservative blog, this gives a good timeline of the changes Bush requested. http://nicedeb.wordpress.com/2008/09/21/the-white-house-warned-congress-about-fannie-mae-freddie-mac-17-times-in-2008-alone/
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  • Without results
    Moderate
    Read the cited article. And why didn't the Republican House pass the legislation? And why didn't the Republican Senate do anything? If the Dems were in control, why didn't the Republicans bring these items up?
    worker
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  • Chained CPI
    mnleps
    Breach of contract. The explicit agreement and an official part of the FERS retirment is that 3rd leg, social security (the first our savings, if we could afford it, the second a small pension (when compared to CSRS). Social security was expected to keep pace with inflation which is why we have been paying into it for decades. Crooks.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Don't foreget about TSP
    ben
    The TSP is part of our savings. Don't contribute, and suffer.
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  • Don't forget the TSP
    UmbratilisFed
    TSP contributions are tax deferred, not tax excempt. You will pay higher taxes on your TSP distributions when you take them under Chained CPI.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • NO!
    ben
    TSP isn't directly affected by CPI. As the annuity portion will be slightly smaller, the taxable total will be slightly smaller. Nothing to crow about, but no tears, either!
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  • NO?
    UmbratilisFed
    Now that is an interesting perspective. You argue that if your annuity is smaller and your SS is smaller then the tax on your TSP will be smaller despite the higher tax rate. Now without the Chained CPI your annuity would be bigger and your SS would be bigger and your overall tax rate would be smaller.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Taxed the whole
    ben
    TSP, annuity and Social security (if other revenue is over $25,000) will be taxed. As social security and annuity will rise by a lower inflation factor, there will be less to tax.
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  • That is taxing
    Moderate
    And lower living standards.
    worker
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  • Austerity will be worse
    ben
    If, forced into an austerity program as more and more nations in the EU, it will be much worse.
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  • Much Ado About Nearly Nothing
    Joe
    I have ran the numbers. Using 10 years of 2.5% CPI inflation vs. 2.25% Chained CPI the reduction in Social Security Benefits, Fed Pensions, etc. is 2.4%. After 40 years (about the longest one will live in retirement) the reduction is 9.3%. So it takes a real long time for this to hurt the individual, but it adds up real fast for the federal budget. The alternative would be a 25% reduction in benefits in 2033 when the SS trust fund dries up. BTW they said in 2007 the trust fund was good thru 2047. Doomsday keeps getting closer.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Substantial loss
    Moderate
    A better way is to raise the social security tax to fund social security. The money lost by those who collect will be substantial.
    worker
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  • Not the first time
    StatMan
    Based on the Boskin Commission in the early 1990s, BLS changed how they calculate the CPI by using geometric means instead of arithmetic means. While all parties involved said it was to correct an upward bias in the CPI, the intended effect was to reduce the increase of the CPI - which it has done. The chained CPI was also recommended in the Boskin report for the same reason. My opinion is that this is the only way for political leaders to cut entitlement programs. It is politically impossible to reduce benefits for seniors, so changing how they adjust for inflation is the solution that both parties prefer. And yes, the federal retirees gets hit as well.
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  • Not the First Time
    UmbratilisFed
    The present CPI is biased towards working people. Retired people buy less and less of the items included in the formula like new cars and appliances and more and more excluded items like health care. Chained CPI simply worsens the problem. The reason that SS benefits aren't covered by contributions is the huge increase in SS elegibility voted on by the Congress. There are many ways to increase the SS fund like changing the elegibility age, eliminating SS disability fraud, means testing and increasing the FICA contribution. The reason that none of these things are implemented is a Congress too interested in being re-elected rather than doing the right thing. Term limits would eliminate the need to taint reasonable solutions with political considerations.
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  • Not the First Time
    UmbratilisFed
    Excuse my error. I said "increasing the FICA contribution". Should have said "incresing the present cap on FICA contributions".
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  • That's a tax hike
    Joe
    Eliminating the cap on FICA wages is a two edged sword. The benefit based on those FICA taxes paid would also increase thereby offsetting the increased taxes paid. The Chained CPI reduces future FICA tax increases by reducing the rate of increase in the cap. I'll take that in exchange for a small income tax hike.
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  • FICA Cap
    Linbob
    No, the FICA cap, if raised to $500,000 or more does not necesarily mean higher benefits. An individual who makes $500,000 (or couple who make $750,000) should be excluded form SS benefits. Means testing is a good thing. SS was so that everyone could live with dignity in their old age. If you make that kind of money, you have more than dignity, honey. You are high on the hog and don't need SS. Consider yourself lucky to not need it and glad to have provided help to others who do need it.
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  • Gotta disagree
    Moderate
    Social security is a life insurance policy with annuity payments. (I know those who do not reach retirement age do not collect. I know there is disability also. My statement is general) The more you pay in, the more you collect. I would rather see a small tax hike to correct social security.
    worker
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  • Two edged sword
    UmbratilisFed
    Yes, eliminating the cap could be a two edged sword unless you incorporate means testing.
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