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Public Pension Problems.
Old 12-10-2018, 05:56 AM   #41
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Public Pension Problems.

A while back Michigan used pension fund money to back some movie making business. Another fiasco.

https://www.michigancapitolconfidential.com/18384

“At a time when Michigan's public sector employees' retirement plans are underfunded by tens of billions of dollars, the state is tapping those funds to pay the bills of a Michigan movie studio that defaulted on its own bills.”

You can’t make this stuff up. [emoji31]
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Old 12-10-2018, 06:56 AM   #42
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Quote:
Originally Posted by ERD50 View Post
"Seasonally Adjusted"? Also does not appear to cover the entire fiscal year?

Geez, all Winemaker said was "all time high". Was he wrong? Cut-Throat throws in "inflation adjusted".

A simple statement made simply isn't wrong if it doesn't include adjustments. I've never heard anyone exclaim "wrong" when talking about a CD that pays 2% (you didn't include inflation!).

I'm not saying these things are not important, they are. But the statement does not deserve a "wrong".

How about this:

https://home.treasury.gov/system/fil..._clean_508.pdf

page 40:
An increase is an increase, isn't it?

-ERD50
I take no sides in this debate, only attempt to add some hard data. There is nothing wrong with seasonally adjusted data, as long as you understand what adjustments are being made.

Detailed quarterly data for fiscal 4Q are not yet available. Here is a detailed breakdown of receipts and expenditures for periods through FY 3Q ‘18. https://fred.stlouisfed.org/release/...&eid=5272&od=#

The conclusions I would draw are, through the first 3 quarters, individual income tax is about the same in absolute $, corporate income taxes are down sharply. The combined amount is down slightly becasue the corporate component is a small % of the total. Other tax and income items are higher. The total amount is close to the same. Individual income tax and total tax collected have not changed in a way that is significant or meaningful.

Spending is substantially higher. A detailed breakdown of 4Q numbers will be available soon, which will allow us a better and clearer understanding of the full fiscal year.

The discussion about “taxes at an all time high” misses the bigger picture. There was a deficit before the tax cuts were implemented, there is a larger deficit now, and spending has increased faster than tax revenues. 4Q data, when available, will not change that.
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Old 12-10-2018, 07:04 AM   #43
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Originally Posted by ERD50 View Post
An increase is an increase, isn't it?

-ERD50

Except when the numbers have been fudged to try and prove a point...


"Yet even these numbers understate revenue losses between 2017 and 2018, since they count revenue raised in 2018 but under 2017's pre-tax cut laws. Roughly three-quarters of the increase in nominal individual income tax revenue since 2017 is the result of non-withheld tax payments made in April (and March) to cover last year's taxes. Another quarter of the rise is from revenue in October, November, and December of 2017 – months which are part of fiscal year 2018 but were under the old tax code.
Excluding October through December as well as non-withheld tax payments, individual income tax revenue is essentially unchanged from 2017. Under this scenario, total nominal revenue is down 4.3 percent, real revenues are down 6.4 percent, and revenues as a share of the economy have decreased by 8.8 percent. Revenues from May through July have fallen even more steeply.*
In other words, revenue has dropped substantially post-tax reform."
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Old 12-10-2018, 07:26 AM   #44
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I take no sides in this debate, only attempt to add some hard data. There is nothing wrong with seasonally adjusted data, as long as you understand what adjustments are being made. ....

Spending is substantially higher. A detailed breakdown of 4Q numbers will be available soon, which will allow us a better and clearer understanding of the full fiscal year.

The discussion about “taxes at an all time high” misses the bigger picture. There was a deficit before the tax cuts were implemented, there is a larger deficit now, and spending has increased faster than tax revenues. 4Q data, when available, will not change that.
No disagreement with any of that. But it is still wrong for anyone to call out Winemaker's statement as "Completely False!". That's what I commented on, nothing else.

I'll stand by my comparison to a statement of purchasing a CD with a published 2% yield. No one should claim that to be "Completely False!", even though leaving out inflation does miss the bigger picture. One can move on to discuss that, but it does not make the initial statement "Completely False!". It's not a good start.

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Originally Posted by Cut-Throat View Post
Except when the numbers have been fudged to try and prove a point...
Winemaker never said "nominal" [edit: I meant to say "inflation adjusted"] Take up your issue with these people:

https://home.treasury.gov/system/fil..._clean_508.pdf

I think we've had enough of this here. If someone does want to discuss the 'big picture' of the effect of the tax changes (a good topic, but good luck surviving a visit by Porky), it probably should be its own thread.

-ERD50
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Old 12-10-2018, 07:39 AM   #45
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Originally Posted by ERD50 View Post

Winemaker never said "nominal". Take up your issue with these people:

[ERD50

Well, you're the one that didn't like Inflation Adjusted, so I gave you what wanted. So which is it Inflation Adjusted or Nominal?
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Old 12-10-2018, 08:22 AM   #46
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Originally Posted by ERD50 View Post
No disagreement with any of that. But it is still wrong for anyone to call out Winemaker's statement as "Completely False!". That's what I commented on, nothing else.

I'll stand by my comparison to a statement of purchasing a CD with a published 2% yield. No one should claim that to be "Completely False!", even though leaving out inflation does miss the bigger picture. One can move on to discuss that, but it does not make the initial statement "Completely False!". It's not a good start.

-ERD50
Others did, but I never said Winemaker was wrong. In fact, he may be right. We need one more Q of data broken out, as details matter. If the intent of his post was to say “there has been no noticeable or relevant decline in taxes collected” I would agree, as the data supports that conclusion.

Sometimes we take the absolute meaning of a post to an extreme, and the discussion gets distorted, and also a bit silly. Could that be happening here?
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Old 12-10-2018, 08:50 AM   #47
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Well, you're the one that didn't like Inflation Adjusted, so I gave you what wanted. So which is it Inflation Adjusted or Nominal?
Sorry, I mixed my terms - should never post before I finish my first cup! Winemaker made a simple statement, it should not be inferred that was an inflation adjusted view.

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Originally Posted by MichaelB View Post
Others did, but I never said Winemaker was wrong. In fact, he may be right. We need one more Q of data broken out, as details matter. If the intent of his post was to say “there has been no noticeable or relevant decline in taxes collected” I would agree, as the data appears to support that conclusion.
...
Yes, it was others that said he was "Completely False!", I was tacking that onto your post, since it also used a different view than what Winemaker referred to.


Quote:
Originally Posted by MichaelB View Post
... Sometimes we take the absolute meaning of a post to an extreme, and the discussion gets distorted, and also a bit silly. Could that be happening here?
Yes! And I was trying to "un-silly" it. IMO, it was silly for anyone to say Winemaker was "Completely False!", just as it would be silly to say that when someone says they purchased a CD with a 2% yield.

But this really has gone far further than it deserves. Again, a separate thread on the issue of the 'big picture' of the tax changes could be interesting.

-ERD50
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Old 12-16-2018, 04:43 PM   #48
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The problem is with Voters believing and voting for what George Bush Sr. used to call "Voodoo Economics".


The Federal Government just this year passed over a Trillion Dollars in Tax Cuts, which it will have to borrow money to Pay for them.
Yes and when Papa Bush broke a campaign promise "read my lips" reference, because additional funding was in the best interest of the countrys sound fiscal position, he was voted out of office. Politicians heard that loud and clear, so now its cut taxes and/or offer some freebees and kick the can down the road
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Old 12-18-2018, 07:56 AM   #49
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In Illinois, our new Gov. Pritzker is pushing for recreational legalization of pot. There's no benchmark for the value of legal pot, except the illegal street value. But also paying for purity and safe/uncut product.

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Old 12-18-2018, 08:46 AM   #50
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Interesting about a carbon tax.... has the state required the farmer to stop burning their fields


When I went to visit my sister up there I was really surprised on how many fields were on fire and all that smoke that was going into the sky... sister said it was an annual thing to clear the land... it was many years ago...
I know this is a late response. Field burning in Oregon is down about 95%. Years ago there was a major burn off I-5 and a tragic multiple car accident. Since then on select crops and areas may be burned. Sometimes it will look like a field burn but actually dust from tilling up the old crops.
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Old 12-18-2018, 10:06 AM   #51
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Another big problem with the pensions is that long ago some of the unions and other people got voters to agree that pensions could not be reduced put into their state constitution..... and nobody wants to be the person who tries to get the constitution changed...


Illinois is a great example from what I read.... they keep passing laws to change the pension but when taken to court they lose and have to go back to the old way... so, instead of passing a law change the constitution... but that will not happen since the politicians in place do not want to do it..
Instead of wasting their time trying to amend the constitution they can create new tiers of workers with less benefits.
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Old 12-18-2018, 10:10 AM   #52
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Yes new employees with the state of Nevada have less retirement benefits than we do.
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Old 12-18-2018, 10:27 AM   #53
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it isn't the tax cuts that are causing the problem. It's the spending.
Not quite.

This might help: https://www.politifact.com/truth-o-m...ts-about-debt/

A portion of which reads:
"What produced this year’s deficit increase?

The two biggest drivers of the projected increase in the 2019 deficit were the Republican tax bill and the bipartisan agreement on federal spending."
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Old 12-18-2018, 02:01 PM   #54
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The tax cuts are certainly a problem, but so is the fact that the Deficit Hawks have gone the way of the Dodo bird.
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Old 12-19-2018, 10:09 PM   #55
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I am not blaming public sector people for this but I recently heard two retiring Illinois teachers talking about the 300 sick days each had accumulated over their careers. Per this article (https://www.illinoispolicy.org/repor...sion-benefits/) an expensive policy:
We also have something like that where I work. The city ran the numbers and would rather us save the time and add it to our years of service vs taking the day off payed sick then paying someone 1.5 overtime and adding that to their high years for pension calc.
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Old 12-20-2018, 12:44 AM   #56
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Instead of wasting their time trying to amend the constitution they can create new tiers of workers with less benefits.
NY is now into tier 6, I retired under tier 4.

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We also have something like that where I work. The city ran the numbers and would rather us save the time and add it to our years of service vs taking the day off payed sick then paying someone 1.5 overtime and adding that to their high years for pension calc.
I wish I could have added my sick as years of service, NY only let me cash out at 50% per day lump sum.
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Old 12-20-2018, 04:48 AM   #57
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So I guess I shouldn't say that the interest rate hikes over the past two years had nothing to do with the increasing deficit either?
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Old 12-20-2018, 11:56 AM   #58
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So I guess I shouldn't say that the interest rate hikes over the past two years had nothing to do with the increasing deficit either?
The way these funding ratios are calculated means that as long term rates rise, the funding ratio improves all else being equal. Part of the calculation involves discounting the future payouts to present value, so as longer term rates rise the present value of the liability falls.
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Old 12-20-2018, 12:11 PM   #59
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Interesting Chicago Tribune editorial this morning concerning the number of people bailing out of Illinois due to its tax and public pension problems: https://www.chicagotribune.com/news/...219-story.html
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Old 12-20-2018, 07:06 PM   #60
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Interesting Chicago Tribune editorial this morning concerning the number of people bailing out of Illinois due to its tax and public pension problems: https://www.chicagotribune.com/news/...219-story.html
One thing I couldn't figure, were they using two different measures here, net and gross?

Quote:
This year’s estimated net reduction of 45,116 residents is the worst of these five losing years.

....

And now in 2018, Illinois lost another 114,154 people.
We're staying for a number of reasons, but family ties will keep us here a while regardless. I've pretty much accepted that if/when we do move, we may be lucky to get our original purchase plus major improvements (done with a lot of not-accounted-for sweat equity) out of this place, after 26+ years. Not counting inflation and the higher taxes we pay.

It's OK. We have liked it here, and the school districts are considered good. And I didn't over-extend myself for the house, so it isn't as bad as it would be for some people whose house represents most of their net worth.

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