The Wisconsin Lie Exposed – Taxpayers Actually Contribute Nothing To Public Employee Pensi

[mrsat_98]

Enjoy !:p

http://blogs.forbes.com/rickungar/2011/02/25/the-wisconsin-lie-exposed-taxpayers-actually-contribute-nothing-to-public-employee-pensions/

Pulitzer Prize winning tax reporter, David Cay Johnston, has written a brilliant piece for tax.com exposing the truth about who really pays for the pension and benefits for public employees in Wisconsin.

Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to “contribute more” to their pension and health insurance plans. Accepting Gov. Walker’ s assertions as fact, and failing to check, creates the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not. Out of every dollar that funds Wisconsin’ s pension and health insurance plans for state workers, 100 cents comes from the state workers.

Via tax.com

How can this be possible?

(Edited for Copyright..click link for rest of article)

[April1775]

horse poop.

[silverhandorder]

In which case they are paid too much. Cut their salary by the amount that they are differing right now. Look the only number one needs to see is their salary and who pays it. How they juggle it shouldn't be our concern.

[April1775]

Four of the five currently solvent states are right-to-work states. The other solvent state is Alaska. I'm not even sure they have laws there.

[FrankRep]

Accepting Gov. Walker’ s assertions as fact, and failing to check, creates the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not. Out of every dollar that funds Wisconsin’ s pension and health insurance plans for state workers, 100 cents comes from the state workers.



Creates the Impression? Individuals create their OWN impressions. You can't say Scott Walker lied because of this.


Cheese Article.

[noxagol]

To say tax payers don't pay the pension because it is differed payment of the teachers salary is dumber than shit because the teachers salary is paid by taxpayers. No matter how much salary they lose and pension they gain, it is all paid for by taxpayers since taxpayers pay 100% of the teachers compensation.

[dean.engelhardt]

To say tax payers don't pay the pension because it is differed payment of the teachers salary is dumber than shit because the teachers salary is paid by taxpayers. No matter how much salary they lose and pension they gain, it is all paid for by taxpayers since taxpayers pay 100% of the teachers salary.

Gotta agree with that. Does the author really think that an accounting trick is going to fool many people?

[pcosmar]

Gotta agree with that. Does the author really think that an accounting trick is going to fool many people?

Yes, yes he does.


flim·flam (flmflm) Informal
n.
1. Nonsense; humbug.
2. A deception; a swindle.
tr.v. flim·flammed, flim·flam·ming, flim·flams
To swindle; cheat.

[aGameOfThrones]

To say tax payers don't pay the pension because it is differed payment of the teachers salary is dumber than shit because the teachers salary is paid by taxpayers. No matter how much salary they lose and pension they gain, it is all paid for by taxpayers since taxpayers pay 100% of the teachers compensation.


This!

[angelatc]

I already handed a liberal union lover his ass over this FUD article on another forum. However, this was my favorite quote from the article, and I can't help but repeat it here:
There is some truth in this (fact that the taxpayers are stuck with the under-funded pension plans) – but not as much as many seem to think. Because the pension plan is a defined benefit plan – requiring the state to pay the agreed benefit for however long the employee may live in retirement- if the employee lives longer than the actuarial plan anticipated, the taxpayer is on the hook for the pay-outs during the longer life.

But is this the fault of the state employees? The pension agreements are the result of collective bargaining.

Which is the whole point that we're trying to make. It's pretty easy to get votes when you promise a boon to your voting block, knowing that you won't be around when the bills actually come due.

The unions fund the candidates, campaign for them, then when they win, the unions walk in and say :" OK, let's talk about our haul." Like another article pointed out - they're electing their own union bosses.

ANnd by the way, pasting that much of an article is copyright infringement.

[newbitech]

lol at the teachers paying 100% of their salaries. EL OH Frigging EL!!!!

Hey guess what gals and guys? From here on out, I am going to be like the teachers and pay 100% of my own salary too! And while I am at it, I am going to take 20% of what I will being paying myself, and invest it in the stock market. Of course whatever vehicle I invest it in, I will use the rest of the money I pay myself to buy up some of those shares too! YEAH!!!!

What this guy is actually describing is a PONZI scheme! We have to keep hiring more and more public workers who produce NOTHING that can be sold or traded for resources. We have to keep hiring more and more so that they can "defer" a portion of their incomes in order to invest and HOPEFULLY get a return on that investment that will pay current salaries. Oh and the bond holders? The American Taxpayer who actually works in a productive job producing things that can be sold or traded.

And that sports analogy? Yeah its called a SALARY CAP! Clubs can keep kicking that payment can down the road, but what happens when they get too many great players deferred? That's right, eventually the cap is reached and those pay later contracts they have? Yeah, they get cut! There is NO guaranteed money in those sports contracts except for the up front signing bonus! Analogy FAIL! Is this guy a journalist or a government mouth piece? Pretty obvious he has no clue of that which he writes!

[pcosmar]

And by the way, pasting that much of an article is copyright infringement.
Nope.
It's recycling electrons.
;)

[angelatc]

Accepting Gov. Walker’ s assertions as fact, and failing to check, creates the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not. Out of every dollar that funds Wisconsin’ s pension and health insurance plans for state workers, 100 cents comes from the state workers.



Creates the Impression? Individuals create their OWN impressions. You can't say Scott Walker lied because of this.


Cheese Article.

Look at this line:
Check out section 13 of the Wisconsin Association of State Prosecutors collective bargaining agreement – “For the duration of this Agreement, the Employer will contribute on behalf of the employee five percent (5%) of the employee’s earnings paid by the State. ”

That sounds like the state is making contributions based on the salary of the employee, not that the employee is having money withheld from his/her salary.

If anybody should be forced to retire on Social Security, it should be the government workers anyway.

[ctnjason]

im so glad this thread was started. i needed the replies from the wiser members of this forum to help torch a liberal whom i have daily arguments with. she emailed me this very article at 6AM........

[Sola_Fide]

To say tax payers don't pay the pension because it is differed payment of the teachers salary is dumber than shit because the teachers salary is paid by taxpayers. No matter how much salary they lose and pension they gain, it is all paid for by taxpayers since taxpayers pay 100% of the teachers compensation.

Yes^^^

Do these people think we are stupid?

[cdc482]

Ya, I don't get how you can say tax-payer dollars don't pay for it. If it's part of their salary that they opt to have at a later date, and the salary + pension + benefits > what they would make doing the same work in a free market, they should definitley get a pay cut. I would go farther and say their salary + benefits should be only as high as needed to provide enough to demand from people willing to take the job.

[cdc482]

lol at the teachers paying 100% of their salaries. EL OH Frigging EL!!!!

Hey guess what gals and guys? From here on out, I am going to be like the teachers and pay 100% of my own salary too! And while I am at it, I am going to take 20% of what I will being paying myself, and invest it in the stock market. Of course whatever vehicle I invest it in, I will use the rest of the money I pay myself to buy up some of those shares too! YEAH!!!!

What this guy is actually describing is a PONZI scheme! We have to keep hiring more and more public workers who produce NOTHING that can be sold or traded for resources. We have to keep hiring more and more so that they can "defer" a portion of their incomes in order to invest and HOPEFULLY get a return on that investment that will pay current salaries. Oh and the bond holders? The American Taxpayer who actually works in a productive job producing things that can be sold or traded.

And that sports analogy? Yeah its called a SALARY CAP! Clubs can keep kicking that payment can down the road, but what happens when they get too many great players deferred? That's right, eventually the cap is reached and those pay later contracts they have? Yeah, they get cut! There is NO guaranteed money in those sports contracts except for the up front signing bonus! Analogy FAIL! Is this guy a journalist or a government mouth piece? Pretty obvious he has no clue of that which he writes!

LOL!
I think he wrote it knowing most ppl will only read the headline.

[lester1/2jr]

one of the silliest articles ever.

[jmdrake]

Expecting individuals to be experts at investing their retirement money in defined contribution plans — instead of pooling the money so professional investors can manage the money as is done in defined benefit plans — is not sound economics. The concept, at its most basic, is buying wholesale instead of retail. Wholesale is cheaper for the buyers. That is, it saves taxpayers money. The Wisconsin State Investment Board manages about $74.5 billion for an all-in cost of $224 million. That is a cost of about 30-cents per $100, which is good but not great. However it is far less than many defined contribution plans, where costs are often $1 or more per $100.”


This is the only part of the article worth responding to. Because this is the direction social security must go to. (Defined contribution instead of defined benefit). Defined benefit plans are inherently discriminatory. They discriminate against gays because of pension benefits being restricted to spouses. You have to depend on the voters to "decide" you have a right to the money. In a defined contribution plan, your pension can go to your spouse, you domestic partner, or your pet llama. Defined benefit plans also discriminate against groups with shorter life expectancies like men in general or African Americans. (Shoot me for being "collectivist" later. But if we're going to win the pension wars we have to lay all cards on the table). The denomination I belong to moved from a defined benefit to a defined contribution pension plan based largely on the argument that black pastors were in general not getting as much from the system because of shorter life expectancies. And lastly, defined contribution plans are by definition solvent. The system can't run out of money because someone lives "too long". Sure the individual can, but not if he planned well during the course of the investment.

Now, do you have to be an expert to plan well? No! You just have to hire the right expert. It could be the same expert currently running the defined benefit plan. Or you might choose to shop around. Here's the kicker folks. It's all about choosing freedom over security. The "security" in the defined benefit plan is if the person running the state plan screws up and underfunds it or looses it all betting on the next Enron or Bernie Maddoff, the state will step in and pick up the tab. The freedom in defined contribution is that it doesn't take a rocket scientist to properly diversify your portfolio. Just a good advisor.

[newbitech]

LOL!
I think he wrote it knowing most ppl will only read the headline.

Maybe. I read the entire article plus all the comments on the site. He is vigorously defending the argument that these comp packages are not gifts but are part of the regular salary that they would have gotten any ways. He is also saying that if the people have a problem with what the state negotiated for with the unions then the people should take it up with the state and not blame the state employees. Well, that is exactly what the people did when they hired the governor to come in and make changes.

Here's the thing about those payments being "gifts".

Definition of GIFT (http://www.merriam-webster.com/dictionary/gift)

1: a notable capacity, talent, or endowment
2: something voluntarily transferred by one person to another without compensation
3: the act, right, or power of giving

So when those guaranteed pensions are not covered by this 5% "investment compensation", do the employees have to eat the loss? NO! It's guaranteed. So where does that money come from? It is transferred by one person to another WITHOUT compensation. Do the teachers work overtime to make up for the short fall? NO. Do they cover the loss with their own funds? NO. They don't give anything in return for the benefit of having their losses covered. Maybe they should. Maybe they should be pissed at their union reps for not telling them that money will always be there for them to count on. Maybe they should be pissed at their financial advisers for telling them that their 5% "investment" carried the risk of the taxpayers NOT being obligated to pay for their losses.

Now if he was arguing that the money is not a gift because it wasn't voluntarily transferred, he may have something going. Bottom line, their union investment failed and the taxpayers are not willing to cover that failure any longer. If they want to renegotiate via their unions, maybe they will agree to work longer hours or work overtime in exchange for the taxpayer covering their investment loss. Otherwise, take a pay cut, or go complain to union rep and/or financial adviser who did not properly disclose the obvious outcome of a failed investment!

You think I get to bitch cause my 401k tanked? Sure, but it's not going to change the fact that that money is lost! And I sure as hell don't get a taxpayer GIFT to cover the loss!!!!

Ridiculous argument from the "journalist" and Pulitzer Prize winner. This article including the link bait headline is as dishonest as they come. The spammer/journalist who is defending the claim that taxpayers covering investment loss is not a gift is clearly trying to shift the attention away from the fact that regardless of how the money gets spent, it is ALL taxpayer funded and if the taxpayer can't pay, then the employees can take a pay cut or find another employer. Period. Full stop.

[Soca Taliban]

What a stupid article!!! The simple fact that ALL the funds are from taxpayers should render this article moot!

[payme_rick]

I didn't read the whole article... It became obvious how retarded it was real quick... But it will serve it's purposes which are to get fence-sitters off of the fence (the ones easily fooled by articles such as this) and to encourage and reassure the ones already in the pasture...

[Danke]

Pulitzer Prize winning tax reporter, David Cay Johnston from the NYT. He has always been a shill for the government on taxation. His reporting is bias against anyone and any issue in the Tax Honesty Movement.

[dannno]

Update


UPDATE: Since this post was published earlier today, many commenters have made the point that, while it is true that it is state employees’ own money that funds the pension plan, when the pension plan comes up short it is up to the taxpayer to make up the difference.

There is some truth in this – but not as much as many seem to think. Because the pension plan is a defined benefit plan – requiring the state to pay the agreed benefit for however long the employee may live in retirement- if the employee lives longer than the actuarial plan anticipated, the taxpayer is on the hook for the pay-outs during the longer life.

But is this the fault of the state employees? The pension agreements are the result of collective bargaining. That means that the state has every opportunity to properly calculate the anticipated lifespan and then add on some margin for error. What’s more, the losses taken by the pension funds over the past few years can hardly be blamed on the employees.

[libertybrewcity]

I'm writing an article of my own and I came across this:

Oh, To Be a Teacher in Wisconsin
How can fringe benefits cost nearly as much as a worker's salary? Answer: collective bargaining.

The showdown in Wisconsin over fringe benefits for public employees boils down to one number: 74.2. That's how many cents the public pays Milwaukee public-school teachers and other employees for retirement and health benefits for every dollar they receive in salary. The corresponding rate for employees of private firms is 24.3 cents.

Gov. Scott Walker's proposal would bring public-employee benefits closer in line with those of workers in the private sector. And to prevent benefits from reaching sky-high levels in the future, he wants to restrict collective-bargaining rights.

The average Milwaukee public-school teacher salary is $56,500, but with benefits the total package is $100,005, according to the manager of financial planning for Milwaukee public schools. When I showed these figures to a friend, she asked me a simple question: "How can fringe benefits be nearly as much as salary?" The answers can be found by unpacking the numbers in the district's budget for this fiscal year:

•Social Security and Medicare. The employer cost is 7.65% of wages, the same as in the private sector.

•State Pension. Teachers belong to the Wisconsin state pension plan. That plan requires a 6.8% employer contribution and 6.2% from the employee. However, according to the collective-bargaining agreement in place since 1996, the district pays the employees' share as well, for a total of 13%.

•Teachers' Supplemental Pension. In addition to the state pension, Milwaukee public-school teachers receive an additional pension under a 1982 collective-bargaining agreement. The district contributes an additional 4.2% of teacher salaries to cover this second pension. Teachers contribute nothing.

•Classified Pension. Most other school employees belong to the city's pension system instead of the state plan. The city plan is less expensive but here, too, according to the collective-bargaining agreement, the district pays the employees' 5.5% share.

Overall, for teachers and other employees, the district's contributions for pensions and Social Security total 22.6 cents for each dollar of salary. The corresponding figure for private industry is 13.4 cents. The divergence is greater yet for health insurance:

•Health care for current employees. Under the current collective- bargaining agreements, the school district pays the entire premium for medical and vision benefits, and over half the cost of dental coverage. These plans are extremely expensive.

http://online.wsj.com/article/SB10001424052748703408604576164290717724956.html

[Maximus]

This has got to be the dumbest article I've ever read.

"Taxpayers don't pay for teachers pensions, because taxpayers paid teachers a higher wage which they used to pay for their pensions"

[TheeJoeGlass]

"If their elected officials have been sloppy , the taxpayers must stand behind it. But if the market continues to perform as it has been performing this past year, don’t be surprised if the funding crisis begins to recede. If it does, what will you say then? "

And what would make elected officials act sloppy? Unions, perhaps played a role, no?

[squarepusher]

In which case they are paid too much. Cut their salary by the amount that they are differing right now. Look the only number one needs to see is their salary and who pays it. How they juggle it shouldn't be our concern.

exactly. How can average of $90k salary for a 10 month work year be considered suitable pay? Highly educated engineers don't even make that type of money.

[libertybrewcity]

This article is wrong. There are different types of pension in the state and most don't pay much of their pension because it is covered. Read the article I posted above.

[angelatc]

This article is wrong. There are different types of pension in the state and most don't pay much of their pension because it is covered. Read the article I posted above.

That article, which is a very good article indeed, seems to cover Milwaukee teachers. I'm sure there are different rates for different districts.

[HOLLYWOOD]

Now where's that Thread about the top 100 Illinois administrators receiving $150 Million in pension obligations?

Democrats and Republican governors are guilty of this "Push the Expense Down the Road when it blows up in 20-30 years" No one brings up Wisconsin's own Tommy Thompson and his stamping of generous packages for AFSCME government employees. Look at the crisis in New Jersey, Republican Christine Todd Whitman is just at fault as Liberal Corzine. They all play this game of pandering to all the special interest groups for; power, elections, and reelections... then they basically use accounting fraud to "PROJECT" the costs and Borrow to meet so-called projections, which never come close. Hell, why not float a 100 year Public Benefits Bond (Century Bond borrowing) so when it comes due next century everyone that borrowed will be dead. Maybe a 'Millennium Bond' is not too far down the road?

California... notice how, as soon as the governorship changed hands, $8 BILLION was added to the states current debt. The previous administration borrowed 6 months of a (percentage) tax revenues from people and businesses in the FY2011, to pay down the previous FY2010 budget numbers. It gives an impression that they were lowering the debt, but in fact, they weren't, they stole from the future and intentional lied(mislead) about future projections of revenue. It's done at almost every level of government now. Frankly just about everytime I see "BOND" on a ballot, I vote NO on the ballot(pending review and creative wording).

Another example if the almighty Congressional Budget Office (CBO)... in the 1960s when LBJ pushed the Medicare/Medicaid welfare, the CBO/CONGRESS progressives projected the cost of the program in 1990 to be $15 Billion... it came in at almost $91 Billion! They were off by a factor of 6. This all comes to what the FEDERAL RESERVE and CONGRESS has been inducing on the country, INFLATION/SWINDLING. It's done multiple ways to cost the people more over the long run, down the road, well AFTER these politicians are held responsible or are long gone.

There needs to be a complete change in this "BOOK COOKING CREATIVE FINANCING/BORROWING" at all levels of government.

PS: SO is the IRS going to TAX those so-called benefits packages now or down the road? Can I defer paying any taxes... until say 2112? ;)