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Why our taxes are so high....

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  • Why our taxes are so high....

    I know a guy who recently retired and hadn't taken a sick day in 37 years.

    It was a government job and he was in a union, so he had all that sick time banked and got paid for it at the full rate; 8 hrs x 12 months x 37 years x his hourly rate. Tack on to that he also got paid at the full rate for all his banked vacation time, which IIRC amounted to another full years pay.

    Not only that, but that checks gross plus his wages for that year counted in calculating the 5 year average that his retirement wages were based on.

    Bottom line he walked out the door with a check that grossed over $200,000 and a monthly retirement pay that was so close to what he made while he was working that the difference was negligible.

    Not to mention that he was eligible for Social Security within a year of retiring, he's a very young 66, and at his income he got close to the maximum benefit.

    Last edited by Dr Mordrid; 6 November 2007, 03:12.
    Dr. Mordrid
    ----------------------------
    An elephant is a mouse built to government specifications.

    I carry a gun because I can't throw a rock 1,250 fps

  • #2
    Is it not normal? He was paying into a system.

    I started earning money when I started my UK National Service in 1951 @28 shillings/week. After I left the army, my first job started in 1954 @ £8 gross/week or £416/year. I left the UK in 1963, by which time I was being paid £1250/year. For those 12 years, I paid into the National Insurance scheme, but stopped in 1963. At the ripe old age of 65, I was eligible for a pro rata state pension of 12/43 of a full pension (43 years payments being required for the full one). My current pension is about £146/month or £1750/year, which is a lot more than I ever earned in the UK and about infinity more than my contributions to the NI scheme. Why? Because the £ has devalued by a factor of over 50 in the meanwhile (the starting salary today would be ~£24,000, where I was getting £416, 53 years ago). If you like, I am drawing a pension proportional to the wealth I actually paid in, not the number of pounds (otherwise, my pension would be <£35/year!).

    So it will be with your guy. He accumulated wealth in benefits from 37 years ago. Is he not entitled to that wealth back again? The number of bucks is not material.
    Brian (the devil incarnate)

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    • #3
      The problem is that with a defined benefit program whose payout is calculated on a 5 last years average counting the sick and vacation time in the last years income is over the top. Very, VERY few programs do that, and this one has to be funded by taxpayers.

      As for the US's Social Security program; it's a Ponzi scheme pure and simple. If a civilian opened an 'investment' business that worked like SS does they'd be in jail before the ink on their business cards was dry.
      Dr. Mordrid
      ----------------------------
      An elephant is a mouse built to government specifications.

      I carry a gun because I can't throw a rock 1,250 fps

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      • #4
        Yes, but banks can lose lenders' money on sub-prime mortgages, put the whole world economy on red alert, as a result, and both the banks and their bosses get off scot-free, if not with a golden handshake.

        This is economic terrorism.
        Brian (the devil incarnate)

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        • #5
          I wouldn't say the banks are getting off scot-free. Citibank is on the verge of being broken up over the sub-prime fiasco. OTOH their now fired chairman will be getting a $100m severance check
          Dr. Mordrid
          ----------------------------
          An elephant is a mouse built to government specifications.

          I carry a gun because I can't throw a rock 1,250 fps

          Comment


          • #6
            Originally posted by Brian Ellis View Post
            Yes, but banks can lose lenders' money on sub-prime mortgages, put the whole world economy on red alert, as a result, and both the banks and their bosses get off scot-free, if not with a golden handshake.

            This is economic terrorism.
            .....





            .
            Diplomacy, it's a way of saying “nice doggie”, until you find a rock!

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            • #7
              I am considering applying for a position with a few banks, promising that although I have never made a fack-up, I _can_ if I really try to, really...
              Join MURCs Distributed Computing effort for Rosetta@Home and help fight Alzheimers, Cancer, Mad Cow disease and rising oil prices.
              [...]the pervading principle and abiding test of good breeding is the requirement of a substantial and patent waste of time. - Veblen

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              • #8
                Another example of economic terrorism by bank officers is resulting in a trial this week. (link in French)

                The Banque Cantonale Vaudoise is a semi-state-owned bank. It is the main source of mortgage money and for commercial credits for SMEs in the Canton of Vaud, a fairly important Swiss State. In the 1990s, they made some bad judgements on loans and, at the same time, some of the directors dipped their hands into the till. It happens: crime is everywhere. Worse, the auditors did not find out why many millions were shipped to the Bahamas where said directors had private accounts. This went on for some time and was discovered only when the bank could not meet its obligations - it was virtually criminally bankrupt.

                When this came to light, an emergency plan was put into action and the Cantonal Government accorded the bank of a loan of, I think, CHF 250 million (USD 120 million) to meet short term obligations (this was correctly repaid, according to plan).

                An unfortunate story but nothing particular to write home about, up to now. So where does the economic terrorism come about? The fact that the bank unilaterally raised its interest rates on mortgages and commercial credits to almost usurious levels in order to pay back the government loan in the shortest time. On mortgages, the average for first loans (75% house value) was upped from 4¼% to 8% and the minimum on commercial credits was doubled from 5% to 10% in one fell swoop. Result: a) large number of foreclosures where the bank was able to repurchase the houses at under value and resell them at huge profits a year later and b) a considerable number of SMEs had to declare bankruptcy or size down their enterprises with laying off employees.

                Fortunately, I never had to use the BCV, as I had a good entry into the UBS, so I was not affected, but I had friends who were, including one whose SME went to the wall and he lost his house into the bargain (OK, it was rocky to start with, but the BCV removed any chance of recovery).

                The trial will last until just before Christmas, but I hope the accused are rewarded for their temerity in a deserved manner, such as 20 years without parole. I fear not, though, as it would create political ripples.
                Brian (the devil incarnate)

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