Financial preparedness - Pension Benefit Guarantee Corporation Running Out of Cash

[Sstrand]

To paraphrase Will Rogers,
I'm more interested in the return Of my capital than the return ON my capital!?!?!?!?

Sheldon

 

[woody06]

I wasn't saying I thought it was OK that most people would rather spend it, I was simply stating the unfortunate truth. Most people lack the self discipline to save for retirement.

 

[woody06]

Heretic - I did something similar a few years ago. I took the statement social security sends out showing how much you paid into SS each year and built a spreadsheet based on the assumption that I invested that money on a DOW index fund. I then calculated how much I could withdraw each year in retirement based on my life expectancy. The amount would be nearly double what I draw in SS.

 

[The Heretic]

I wasn't saying I thought it was OK that most people would rather spend it, I was simply stating the unfortunate truth. Most people lack the self discipline to save for retirement.

Absolutely. But it isn't the job of the government to force people to save. In the wider perspective, it isn't the job of the government to protect people from themselves. We are each responsible for our own actions.

Of course, most people, left and right, do not believe that.

 

[woody06]

Absolutely. But it isn't the job of the government to force people to save. In the wider perspective, it isn't the job of the government to protect people from themselves. We are each responsible for our own actions.

Of course, most people, left and right, do not believe that.

I agree with you but, unfortunately, our government has taken on the task and a significant percentage of the population now relies on the government to provide for them. That's why so many "tax and spend" politicians keep getting reelected.

 

[Flymph]

...or a quiet back room government bailout deal. "We'll read it after it's passed"...could result in a "nifty" economic situation ala Greece...

That would only work if the UN bailed out the US, which I don't see happening given their economies. Scandinavia can't fix the world, but the world can take a hint as how to fix itself.

 

[ATCclears]

America's Pension Bomb: Illinois Is Just the Start | Zero Hedge

 

[41mag]

Don't tax income. Tax sales

the question there is 'what part of sales'? If I sell you something that cost me $1000 and you pay $1150, then the $150 is 'income' to me which by your comment isn't taxed.
And the Sales tax on '$1150' amounts to what %, and now my '$150 profit' is reduced by the sales tax.

As you say, 'whats the point' of doing such exercise?

 

[The Heretic]

the question there is 'what part of sales'? If I sell you something that cost me $1000 and you pay $1150, then the $150 is 'income' to me which by your comment isn't taxed.
And the Sales tax on '$1150' amounts to what %, and now my '$150 profit' is reduced by the sales tax.

As you say, 'whats the point' of doing such exercise?

All sales - no exemptions. A flat sales tax on any product or service, bought by the end consumer (products bought 'wholesale' for resale are not taxed), on the sale price.

So in your hypothetical example, if the tax rate is 10% the buyer (not the seller) pays $115 tax, total cost being $1150+$115 for $1265. The seller collects the tax and passes it on to the government. This is how it works in any locale (usually states) that have a sales tax.

If you earn interest on funds/etc. you pay no tax on that income. You pay no tax on any other income (wages/salary/etc.). Consumers only pay tax on goods & services they purchase, not their income. Most people do not spend more on goods & services than their income (granted, a significant portion of people do, but that is not sustainable in the long term) and for many people, consumption of goods and services is something that they can control to a degree.

 

[41mag]

thanks for clarification...this is a 'consumption' tax then?
My loaf of day-old bread & your $4M yacht all pay same rate sales tax?

 

[The Heretic]

thanks for clarification...this is a 'consumption' tax then?
My loaf of day-old bread & your $4M yacht all pay same rate sales tax?

Yes.

Fair is not taxing someone more just because they can pay more. That is what is meant by "flat tax".

Taxes go to pay for "the commons" - i.e., government services (national defense, infrastructure, law enforcement, courts, public lands), not to subsidize anyone or anything.

All persons and entities would/should pay for those services as they all benefit from them, so no subsidies, no exemptions, no deductions, no rebates, no minimums and no sin taxes (no punishing people for consuming something that others do not like - do not use taxes to manipulate behavior or implement social mores). Everyone pays the same rate on everything.

 

[41mag]

"Taxes go to pay for "the commons" - i.e., government services (national defense, infrastructure, law enforcement, courts, public lands), not to subsidize anyone or anything." its a good theory, any odds on seeing it in our lifetime?

 

[The Heretic]

"Taxes go to pay for "the commons" - i.e., government services (national defense, infrastructure, law enforcement, courts, public lands), not to subsidize anyone or anything." its a good theory, any odds on seeing it in our lifetime?

Nope.

• A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.
  The average age of the world's greatest civilizations from the beginning of history has been about 200 years. During those 200 years, these nations always progressed through the following sequence:
  
  • From bondage to spiritual faith;
  • From spiritual faith to great courage;
  • From courage to liberty;
  • From liberty to abundance;
  • From abundance to complacency;
  • From complacency to apathy;
  • From apathy to dependence;
  • From dependence back into bondage.

Henning Webb Prentis

 

[The Heretic]

Once conditioned to the ability to vote themselves "entitlements" the populace will continue and will not reverse itself until the whole system collapses and is rebuilt anew - thereafter repeating itself once again.

The populace is thus conditioned first by the government spending from the public treasury "for the public good" until such time as the public starts thinking it is their right to receive these transfers of wealth from the others, and then those who want the power promise them "free" this and that (nothing is ever free, especially when the government takes from one person's pocket and gives it to another).

 

[The Heretic]

Then there are all the exemptions/deductions/subsidies which special interests fight for tooth and nail.

E.G., I personally get a subsidy from the government in the form of a deduction for mortgage interest - I deduct that from my gross income and I am not taxed for it. That is a healthy subsidy for my property to the tune of about $2K to 3K per year (the amount of tax I probably would have paid on the interest).

I don't feel bad about it, because I should not be paying tax on my income in the first place. There are two things pols will probably never touch in any kind of tax or budget legislation; eliminating the mortgage interest deduction, and social security. These are "holy cows" to a LOT of people, and it would be the end of a pols career to make significant changes to them.