NPR: “Offshore Tax Havens”

[CA renter]

[quote=briansd1][quote=gandalf]Brian,

The financial industry is directly and primarily responsible for the financial crash.

Yes, pension funds are underfunded. The underfunding is a percentage of overall losses. But most of the lost wealth is attributable to the financial crash.

Underfunding is a partial cause. The financial crash is the prime cause.[/quote]

That would be like saying that I need $500,000 for my retirement.

So I bought a house for $200,000 (or invested that amount in a portfolio) which then appreciated to $500,000 at the peak. I was happy, my retirement was taken care of.

But, OMG, the market crashed so my house is now only worth $250,000. Wall Street was responsible for my loss. I can’t retire, so they owe me!!!

Seriously, I was a participant in the market also and I originally benefited from it because I only had to put in $200,000 of my salary income. Therefore, over the years, I could enjoy a nicer lifestyle. But I could have lived more frugally, saved more, and bought safe US treasuries to reach the $500,000 goal that I needed. In the latter case the vagaries of Wall Street would not have affected me.[/quote]

What if you bought those Treasuries from, say…Goldman Sachs, and they sold you AAA-rated bonds. Let’s say that the Treasuries were bundled in such a way that there was no real transparency; you knew these securities were backed by Treasuries, but weren’t told that buried deep in presumably “govt backed” Treasuries, there were “Treasuries” from Zimbabwe and Somalia. But Goldman Sachs didn’t tell you that. They just told you that these were bundles of AAA-rated “government-backed” debt.

Let’s say Goldmans Sachs was paid a handsome commission/fee for handling these sales to you. Billions and billions of dollars over the years. Now, let’s say there was an “unexpected” problem in the African debt market (okay, you got me, the failure in this debt market might not really be “unexpected,” but we’ll just call it that, okey-dokey?). Now, you are seeing losses of 30%, 40%…80% on some of these securities. Yikes!

Meanwhile, Goldman Sachs was shorting these securities, even though “NOBODY could have seen the defaults coming.”

Once the “financial crisis” becomes more apparent, the U.S. govt decides to prop up the prices of this debt, so they buy or guarantee a good portion of these investments. As a pension fund manager, you also benefit from this “propping up,” but the losses you’ve taken still put you in the red.

So, Goldman Sachs made money on the upside, and the downside. They’ve also not had to fork over any of the fees/commissions they’ve made selling these securities to you. They also benefit by having the govt guarantee the debt that they still hold on their books. They’ve made out very well…far better than you have.

Now, the pension funds are still underfunded, partially because of the losses, and also because you didn’t fund them when the times were really good. The returns were so high during the “African debt” bubble, that you told the govt employers not to contribute any money toward these pensions.

And now, we turn to the union members… Somehow, they MUST be responsible for these losses, right? Somehow, THEY are the ones who’ve caused the pension funds to be underfunded, right?

IMHO, I think it’s prudent to have Goldman Sachs (in my example) give back all fees and commissions charged for EVERY SINGLE TRANSACTION involving these securities. Then, let’s give back all of the profits they’ve made shorting these securities. Let’s use this money to offset the losses in your pension fund. Once that’s done, we can talk about reducing compensation for the workers. First things first. Let the financial firms take the first loss on these investments. Then, we can deal with the unions.

[CA renter]

In the spirit of trying to stay on topic… 😉

I favor a steeply progressive income tax, with a top marginal rate of ~70-80%.

Believe it or not, I would favor a low corporate tax rate, but would require corporations to pay for the benefits of incorporation and limited liability by requiring more transparency and would enforce a pay ratio so that the top earner in a corporation could not earn more than X times the pay of the lowest paid employee. I would also require profits to be divided up more equally between shareholders and employees.

If we want to encourage work and productivity over speculation (and I certainly do), we need to revise the tax system so that WORK is rewarded more than “investing.” Right now, the opposite is true, and we can see the results of that in our broken-down, bifurcated economy.

If we want to fix Social Security, remove the income cap on SS contributions, and means test. Yes, it’s “socialism,” but that’s the price we pay for living in a civilized society.

[CA renter]

In the spirit of trying to stay on topic… 😉

I favor a steeply progressive income tax, with a top marginal rate of ~70-80%.

Believe it or not, I would favor a low corporate tax rate, but would require corporations to pay for the benefits of incorporation and limited liability by requiring more transparency and would enforce a pay ratio so that the top earner in a corporation could not earn more than X times the pay of the lowest paid employee. I would also require profits to be divided up more equally between shareholders and employees.

If we want to encourage work and productivity over speculation (and I certainly do), we need to revise the tax system so that WORK is rewarded more than “investing.” Right now, the opposite is true, and we can see the results of that in our broken-down, bifurcated economy.

If we want to fix Social Security, remove the income cap on SS contributions, and means test. Yes, it’s “socialism,” but that’s the price we pay for living in a civilized society.

[CA renter]

In the spirit of trying to stay on topic… 😉

I favor a steeply progressive income tax, with a top marginal rate of ~70-80%.

Believe it or not, I would favor a low corporate tax rate, but would require corporations to pay for the benefits of incorporation and limited liability by requiring more transparency and would enforce a pay ratio so that the top earner in a corporation could not earn more than X times the pay of the lowest paid employee. I would also require profits to be divided up more equally between shareholders and employees.

If we want to encourage work and productivity over speculation (and I certainly do), we need to revise the tax system so that WORK is rewarded more than “investing.” Right now, the opposite is true, and we can see the results of that in our broken-down, bifurcated economy.

If we want to fix Social Security, remove the income cap on SS contributions, and means test. Yes, it’s “socialism,” but that’s the price we pay for living in a civilized society.

[CA renter]

In the spirit of trying to stay on topic… 😉

I favor a steeply progressive income tax, with a top marginal rate of ~70-80%.

Believe it or not, I would favor a low corporate tax rate, but would require corporations to pay for the benefits of incorporation and limited liability by requiring more transparency and would enforce a pay ratio so that the top earner in a corporation could not earn more than X times the pay of the lowest paid employee. I would also require profits to be divided up more equally between shareholders and employees.

If we want to encourage work and productivity over speculation (and I certainly do), we need to revise the tax system so that WORK is rewarded more than “investing.” Right now, the opposite is true, and we can see the results of that in our broken-down, bifurcated economy.

If we want to fix Social Security, remove the income cap on SS contributions, and means test. Yes, it’s “socialism,” but that’s the price we pay for living in a civilized society.

[CA renter]

In the spirit of trying to stay on topic… 😉

I favor a steeply progressive income tax, with a top marginal rate of ~70-80%.

Believe it or not, I would favor a low corporate tax rate, but would require corporations to pay for the benefits of incorporation and limited liability by requiring more transparency and would enforce a pay ratio so that the top earner in a corporation could not earn more than X times the pay of the lowest paid employee. I would also require profits to be divided up more equally between shareholders and employees.

If we want to encourage work and productivity over speculation (and I certainly do), we need to revise the tax system so that WORK is rewarded more than “investing.” Right now, the opposite is true, and we can see the results of that in our broken-down, bifurcated economy.

If we want to fix Social Security, remove the income cap on SS contributions, and means test. Yes, it’s “socialism,” but that’s the price we pay for living in a civilized society.

[briansd1]

CA renter, I don’t buy your argument on the pension fund losses.

Pension managers are highly paid inviduals who should have known better. IMHO, Retail investors deserve to be made whole more that large professional pension funds.

Many foreign pension funds invested on Wall Street as well. Should they be made whole too?

Risk is an inherent feature of our economy. That’s how the system is designed. Even money markets accounts would have crashed had the government not intervened.

If you want to sue Wall Street to recoup losses, have at it. All the more power to you.

But in the mean time, governments should not make up the pension losses while cutting services to the citizens.

My children should not be required to make up the $250,000 loss in my portfolio. I should delay my retirement or keep on working.

Besides, I only contributed $200,000 to my portfolio which at one point grew to $500,000. Now that the value of the portfolio is only 1/2 of its peak value, I can’t afford to retire.

But could I really argue that I suffered a loss of $250,000 and that Wall Street owes me that amount? That would be a stretch.

*

On tax policy, I agree with you. But what could have been or what could be is not the reality that we have now.

We need to deal with the budget realities we have today.

[briansd1]

CA renter, I don’t buy your argument on the pension fund losses.

Pension managers are highly paid inviduals who should have known better. IMHO, Retail investors deserve to be made whole more that large professional pension funds.

Many foreign pension funds invested on Wall Street as well. Should they be made whole too?

Risk is an inherent feature of our economy. That’s how the system is designed. Even money markets accounts would have crashed had the government not intervened.

If you want to sue Wall Street to recoup losses, have at it. All the more power to you.

But in the mean time, governments should not make up the pension losses while cutting services to the citizens.

My children should not be required to make up the $250,000 loss in my portfolio. I should delay my retirement or keep on working.

Besides, I only contributed $200,000 to my portfolio which at one point grew to $500,000. Now that the value of the portfolio is only 1/2 of its peak value, I can’t afford to retire.

But could I really argue that I suffered a loss of $250,000 and that Wall Street owes me that amount? That would be a stretch.

*

On tax policy, I agree with you. But what could have been or what could be is not the reality that we have now.

We need to deal with the budget realities we have today.

[briansd1]

CA renter, I don’t buy your argument on the pension fund losses.

Pension managers are highly paid inviduals who should have known better. IMHO, Retail investors deserve to be made whole more that large professional pension funds.

Many foreign pension funds invested on Wall Street as well. Should they be made whole too?

Risk is an inherent feature of our economy. That’s how the system is designed. Even money markets accounts would have crashed had the government not intervened.

If you want to sue Wall Street to recoup losses, have at it. All the more power to you.

But in the mean time, governments should not make up the pension losses while cutting services to the citizens.

My children should not be required to make up the $250,000 loss in my portfolio. I should delay my retirement or keep on working.

Besides, I only contributed $200,000 to my portfolio which at one point grew to $500,000. Now that the value of the portfolio is only 1/2 of its peak value, I can’t afford to retire.

But could I really argue that I suffered a loss of $250,000 and that Wall Street owes me that amount? That would be a stretch.

*

On tax policy, I agree with you. But what could have been or what could be is not the reality that we have now.

We need to deal with the budget realities we have today.

[briansd1]

CA renter, I don’t buy your argument on the pension fund losses.

Pension managers are highly paid inviduals who should have known better. IMHO, Retail investors deserve to be made whole more that large professional pension funds.

Many foreign pension funds invested on Wall Street as well. Should they be made whole too?

Risk is an inherent feature of our economy. That’s how the system is designed. Even money markets accounts would have crashed had the government not intervened.

If you want to sue Wall Street to recoup losses, have at it. All the more power to you.

But in the mean time, governments should not make up the pension losses while cutting services to the citizens.

My children should not be required to make up the $250,000 loss in my portfolio. I should delay my retirement or keep on working.

Besides, I only contributed $200,000 to my portfolio which at one point grew to $500,000. Now that the value of the portfolio is only 1/2 of its peak value, I can’t afford to retire.

But could I really argue that I suffered a loss of $250,000 and that Wall Street owes me that amount? That would be a stretch.

*

On tax policy, I agree with you. But what could have been or what could be is not the reality that we have now.

We need to deal with the budget realities we have today.

[briansd1]

CA renter, I don’t buy your argument on the pension fund losses.

Pension managers are highly paid inviduals who should have known better. IMHO, Retail investors deserve to be made whole more that large professional pension funds.

Many foreign pension funds invested on Wall Street as well. Should they be made whole too?

Risk is an inherent feature of our economy. That’s how the system is designed. Even money markets accounts would have crashed had the government not intervened.

If you want to sue Wall Street to recoup losses, have at it. All the more power to you.

But in the mean time, governments should not make up the pension losses while cutting services to the citizens.

My children should not be required to make up the $250,000 loss in my portfolio. I should delay my retirement or keep on working.

Besides, I only contributed $200,000 to my portfolio which at one point grew to $500,000. Now that the value of the portfolio is only 1/2 of its peak value, I can’t afford to retire.

But could I really argue that I suffered a loss of $250,000 and that Wall Street owes me that amount? That would be a stretch.

*

On tax policy, I agree with you. But what could have been or what could be is not the reality that we have now.

We need to deal with the budget realities we have today.

[SK in CV]

Brian, you’re arguing a claim that was never made. The claim was that the financial crash is the primary cause of the pension crisis. This is fact. It is inarguable. If not but for the financial crash, there would be no pension crisis. The end.

That is not the same as “blame it on wall street”.

[SK in CV]

Brian, you’re arguing a claim that was never made. The claim was that the financial crash is the primary cause of the pension crisis. This is fact. It is inarguable. If not but for the financial crash, there would be no pension crisis. The end.

That is not the same as “blame it on wall street”.

[SK in CV]

Brian, you’re arguing a claim that was never made. The claim was that the financial crash is the primary cause of the pension crisis. This is fact. It is inarguable. If not but for the financial crash, there would be no pension crisis. The end.

That is not the same as “blame it on wall street”.

[SK in CV]

Brian, you’re arguing a claim that was never made. The claim was that the financial crash is the primary cause of the pension crisis. This is fact. It is inarguable. If not but for the financial crash, there would be no pension crisis. The end.

That is not the same as “blame it on wall street”.

[Author]

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