Originally posted by dolphinfan
reply to post by elfie
The "average joe" is a part of this problem on the investment side of the equation as well and that includes folks like teachers and union folks.
During the run-up of the market based on speculative practices, CDOs and the like, investors were pushing their pension fund committees for higher and higher return vehicles. The pension funds which are large institutional investors pushed the asset management firms for more return on their investment. That was one of the reasons that these banks continued to push the envelope of risk within their portfolios. In an asset management, fee based environment the loss of a large public employee pension account like Nevada's teachers or CALPERS means $billions of lost assets and millions of lost revenue and these firms were doing what they could to keep their clients.
Did all of these shops do that? No and they lost significant asset base and many were either bought or went out of business.
You never hear about the retired Teamster who shows up at his union pension committee annual meeting and pounds the table about inadequate returns on his pension account. "Why did we get an 8% increase on our fund when the XZYZ Janus fund was up 90% year over year?" If you don't think that has an impact on the risk that portfolio managers take, you are wrong.
Keep in mind that the folks running these public pensions are highly paid and have a significant stake in happy account holders. Some of these gents hire outside firms to manage the cash and some have staffs that manage the staff, but either way they stood to lose their jobs because the account holder, e.g. teacher or plumber was demanding more money out of them.
The greed in this deal was not just at the top, but at the bottom as well.
Originally posted by Wildbob77
reply to post by Zosynspiracy
If you're only making $25,000 per year you're not paying 65% in taxes.
Remember, the bottom 47% don't pay taxes.
My previous reply suggested a flat tax. We all pay the same percentage.
Right now, it's the middle class and up that pay all the taxes. The poor don't pay any.
Even if the discussion is restricted to federal taxes (for which the statistics are better), a vast majority of households end up paying federal taxes. Congressional Budget Office data suggests that, at most, about 10 percent of all households pay no net federal taxes. The number 10 is obviously a lot smaller than 47. The reason is that poor families generally pay more in payroll taxes than they receive through benefits like the Earned Income Tax Credit. It’s not just poor families for whom the payroll tax is a big deal, either. About three-quarters of all American households pay more in payroll taxes, which go toward Medicare and Social Security, than in income taxes.
In the 1950s the marginal tax rate on those earning more than $3 million a year (in today’s dollars) was 91 percent. By 1990 it was 28 percent. The IRS says that the top 400 richest tax filers actually paid a rate of just 16 percent in 2007 (the latest numbers we have). Yep, the richest earners — people who took in an average of $343 million each — probably paid a lower rate than you did. Something to consider as you sign your 2009 return.
Surpluses, which in theory should fund benefits for future retirees, are instead raided by Congress and squandered on unrelated spending programs. The late New York senator, Daniel Patrick Moynihan, called this "outright thievery." Here's how the raid works: The surplus payroll tax dollars go into the Social Security Trust Fund, which in turn uses them to buy special issue bonds from the U.S. Treasury.
While the story made national headlines, the government targeted an operation that catered to little guys, the poor and lower middle class. However, they failed to focus on some big-time tax cheats whose fraud was much greater, but who happen to be top-tier Republican contributors. What the press conference should have announced was: "Swift Boat" financier Sam Wyly cheated the U.S. of at least $300 million in taxes." And, "The money that paid for the "Swift Boat" campaign was your money!"
In 2000, Bank of America, the country's second-largest commercial bank, began offering a tax shelter called STARS, which the IRS has ruled illegal. Among the happy clients were Wyly and his brother Charles, who controlled the $5 billion Michaels Stores, the arts-and-crafts retailer with 900 shops. The idea was to evade taxes by giving themselves stock options and transferring them to offshore corporations controlled by secret trusts in the Isle of Man, that famous British tax haven in the Irish Sea. "Manx" companies are routinely fakes; one of the front men on the boards of all the Wyly entities is a sheepherder, who picks up cash for use of his name.
Every major private banking department offers a product called the "private placement offshore of variable annuities."
Those numbers are probably low: According to a Tax Justice Network report quoted by the Senate investigation and based on statistics from Merrill Lynch/Cap Gemini's "World Wealth Report" and the Boston Consulting Group's "Global Wealth Report," 16.2 percent of the private wealth of North Americans, $1.6 trillion, is held offshore. The overwhelming reason for that is tax evasion.
Originally posted by dolphinfan
reply to post by drew hempel
Yes it has been raided. That has nothing to do with my point. You get money out of those services by virtue of paying into them via the payroll tax. What happens to the the money during the period of when you take it out and when you put it in is irrelevant.
The funds were rated because they needed it to fund social programs targeted at the folks who are not paying income taxes
This is a distortion of how our income tax dollars are spent because it includes Trust Funds (e.g., Social Security), and the expenses of past military spending are not distinguished from nonmilitary spending. For a more accurate representation of how your Federal income tax dollar is really spent, see the large chart (top).
The 2011 military budget, by the way, is the largest in history, not just in actual dollars, but in inflation-adjusted dollars, exceeding even the spending in World War II, when the nation was on an all-out war footing. This military spending in all its myriad forms represents 53.3% of total US federal spending.
In all, military spending for the fiscal year 2002 has risen by nearly $54 billion over the initial 2001 level of $291 billion, an increase of almost 19% percent. For the fiscal year 2003 it will amount to $376 billion, the highest item in the Federal budget (of approximately $2,130 billion).  (Officially, military spending is the second highest item in the Federal budget after Social Security payments. But Social Security is a self-financing trust fund. So, in reality, military spending is the highest budget item.)
As there is no money to be made from the poor, Wall Street fleeces them by yanking away their entitlements. It has always been thus. During the Reagan administration, Wall Street decided to boost the values of its bond and stock portfolios by using Social Security revenues to lower budget deficits. Wall Street figured that lower deficits would mean lower interest rates and higher bond and stock prices.