Wednesday, December 1, 2010

Life, Death, And Taxes

My St. John's friend and the founding treasurer of St. John's School, Bruce Hughes, shown here with Lisa at son Scott's June wedding, wrote to the Orange County Register about one of the recommendations of the bipartisan debt commission:
I am happy to hear that our government’s debt commission is finally trying to be fiscally responsible and rein in our national debt by reducing our payments from Social Security and Medicare. After all, no one guaranteed these people that they would actually collect from the taxes that they paid for 40 or 50 years. They were also told that this government pittance would not be enough to support them through their elderly years and they would need to supplement this pension. As such, they should all have some savings in the bank. Maybe we can tax this money, too.

The more I consider this proposal, the angrier I get. Our Washington elected politicians can retire at any age after 20 years of service while receiving 80 percent of their full salary. Public employees can retire after 25 years of service at any age with near full salary benefits. This proposal is creating an elite group who can stop working at an early age, with near full salaries and all the rest of us who will be like cattle led to slaughter.

The rest of us must continue to work until we die and pay taxes to support the public employees and politicians. If this deficit commission wants change, let’s make the system equal. That will be a major change.


MK said...

We hated public employees are a target again. Sigh. A sign of the divide and conquer age we live in. Hello, it's not as if they're getting something for nothing.

At least in the federal world, the requirement for regular civilian employees is that you have 30 years service and be at least 55 before you are eligible to retire. You certainly don't receive 80% of your salary at that point. Moreover, feds make payments towards their retirement, it isn’t handed to them for nothing. Their FERS pension derives from a combination of a basic benefit plan, Social Security and the Thrift Savings Plan, a 401(k) type set up. Just ask any fed what the difference is between their gross and net pay while they are working. As the Office of Personnel Management tells federal employees, “The Basic Benefit and Social Security parts of FERS require you to pay your share each pay period. Your agency withholds the cost of the Basic Benefit and Social Security from your pay as payroll deductions. Your agency pays its part too. Then, after you retire, you receive annuity payments each month for the rest of your life.”

As for the TSP, that is “an account that your agency automatically sets up for you. Each pay period your agency deposits into your account amount equal to 1% of the basic pay you earn for the pay period. You can also make your own contributions to your TSP account and your agency will also make a matching contribution. These contributions are tax-deferred. The Thrift Savings Plan is administered by the Federal Retirement Thrift Investment Board.”

Depending on their financial situations, many feds work well beyond 55. News flash, we’re human beings with differing circumstances, just like “real” Americans. I know one federal employee who retired after 47 years federal service. (I myself have 37 years in and don't plan to retire any time soon.) The idea that public sector employees are leeches whose retirement funds magically are handed to them is dismaying. Moreover, it’s not as if we sit around doing nothing all day while we’re at work. Ahem, some of us even take some “bullets” in the public interest. Many others perform critical functions at the FBI, Homeland Security, Department of State, Department of Defense, etc. And yes, even thought there are fewer of us now than there were during the 1950s, 1960s, 1970s, and 1980s, those of us who are left do care about the public and want its members to get a good ROI in the areas in which they depend on us, even if that isn’t always reciprocated. . . .

MK said...

John, as you probably guessed already, the “hello” and “news flash” comments in my post above were directed to the general reader, not you. I daresay you already know much of what I described in my post. I believe these issues are difficult to resolve because people are all over the place on them. It’s not just party or ideology or the generational warfare some fear, it’s also temperament and willingness to consider how things look to others.

A senior recently published in The Washington Post a very different letter from the one above. She wrote, “Yes, I've had the benefit of Social Security and Medicare for 15 years now. And, yes, my other income has diminished greatly as investments and interest rates plummeted in 2007 and 2008, and my house has lost much value. But those of us who lived through the Depression and World War II understand that there are times when we must sacrifice. I am well-fed and have a place to live. Many of our finest citizens risk their lives in Afghanistan. Highly skilled younger people who have children to put through college have lost their jobs and are desperately afraid, and many more skilled laborers have been unemployed for years and for them the recession is personal and unrelenting.” She said she believed that those who are retired need to sacrifice to help those who have been fired.

A 90-year old lifelong Republican I know has said repeatedly that s/he never has objected to paying higher taxes so as to reduce the deficit. S/he says, “there’s no such thing as a free lunch, it’s long past time to stop kicking the can down the road.”

On the other hand, in an article about how senior citizens vote , an historian offered what sounds like a stereotyping view: "’On social policy, we have a generation that consumes a huge portion of the federal budget yet doesn't approve of other Americans receiving benefits,’ said Julian Zelizer, a professor of history and public affairs at Princeton University. ‘On cultural issues, there is a huge disconnect between retirees and much of the rest of the country.’" Sounds unfair. Is the assertion sustainable? I don’t know, I haven’t seen polling data on this.

As for the oft-derided feds, what was my reaction to hearing that our pay will be frozen for two years and that we may be asked to contribute more in terms of payroll deductions for some of our benefits? I turned around and submitted my government workers Combined Federal Campaign pledge to private charities at well over a Double Eagle (the designation for contributing at least 2% of salary) level. My reaction to “tighten your belt, you’ll get less” was to reach into my pocket and to give more to others. That only represents a small portion of my charitable giving, as like many federal employees, I also write checks out to other charities at home, outside the scope of CFC.

I have to admit, however, that years of reading about coastal elites and how some Internet posters hate those of us who live in the Washington area or in cities or who work as historians have led me to adjust my charitable giving. Where I once gave to national charities primarily, I’m more cautious about that now. Although I sometimes vote D and sometime R, as we independents do, I now focus more on local charities in my blue and purple state region, although I still give some to national charities. When I do give to national charities, I’m mindful of the fact that some secondary recipients may hate me not for who I am as a person but for what they imagine me to be. I try to overlook the image of them spitting in my face rather than benefit from my giving.

Perhaps the “no labels” campaign to which Joe Scarborough lent his support this week will bring more voices of moderation and the old “let’s work together” America to the fore, crowding out some of those on the right and the left who thrive on divisiveness.