Skip to comments.Municipal 'millionaires' (Cuomo tax hikes to fund pensions of public sector leeches)
Posted on 12/01/2011 7:21:26 AM PST by jimbo123
Gov. Cuomo, under enormous pressure from public-employee unions and Democrats in the Legislature to extend New Yorks millionaires tax, is considering at least some higher taxes on higher incomes. The big irony here is that much of the money raised from any millionaire tax hikes would go to fund the growing phenomenon of public-sector millionaires.
Hows that? Well, most dictionaries define a millionaire as someone with wealth (i.e., assets) of $1 million. By that definition, many New York teachers and the vast majority of police and firefighters are millionaires, because the net present value of their retirement benefits is well in excess of $1 million.
That is, if they had to fund their retirements from their own savings, theyd have to set aside seven figures today.
Few who dont work for the government sector have comparable assets.
(Excerpt) Read more at nypost.com ...
“The gov’t 1%’ers”, I like that description. Having a family filled with teachers, I have been arguing for years that they are the wealthy ones, not me. Even though I make significantly more than they do, I pay more in SS & Medicare tax, am limited in the tax advantaged 401k at work, and pay far more in income taxes.
They make less money now, but all the back loaded retirement benefits the accrue are not taxed at all and if the $25K or so in untaxed pension and health benefits were added to their taxable income, they would be howling like I do every year when I do my taxes.
Whats that stampede sound I hear! I think it’s the “1%” leaving New York and heading for a friendly southern Red State. We’ll be happy to have you all spending your money and creating jobs in our states.
It would not be government 1%’ers. According to my data in Colorado, it would be 50%’ers if you are measuring the pension values. My studies have estimated the difference between the pension values and accumulated values of contributions plus interest. In Colorado, the average administrator in K-12 and higher ed had about $900,000 in surplus deferred compensation. The average teacher had $500,000 in surplus deferred compensation.
The legislature has enacted two major bailouts in 5 years. Employer contributions are scheduled to increase to 20+ percent. I do not think that employers can contribute such large amounts tax free. In addition, many (all?) public employers do not pay their share of the Medicare payroll tax (1.45 percent). Instead this amount is redirected to subsidize early retirement medical care.
At a MINIMUM each $40,000 per year worth of retirement benefits after age 60 or so has a present value of over $1,000,000. Probably a lot more than that since the benefit is guaranteed by the tax payer, there is little market risk to it.
The younger you retire the more you need to have socked away.
Govt workers are the biggest leeches and parasites in this country. Defined benefit pension is a financial WMD against the taxpayers.
the taxpayers are going to have to tighten their belts some more to keep the public servants comfortably maintaining their millionaire status. Who would have thought the easiest way to becoming a millionaire in NY would be to get on the government payroll.