It's The Tax System

    I've been generally very positive about the quality of Mary Williams Walsh's reporting about pensions for The New York Times. I think she typically understands the issue better than most reporters. Today, she launched the first in a series of articles reporting on the public pension plan system (as distinguished from the private sector pension system). Here's her theme:

But by one estimate, state and local governments owe their current and future retirees roughly $375 billion more than they have committed to their pension funds.

And that may well understate the gap: Barclays Global Investments has calculated that if America’s state pension plans were required to use the same methods as corporations, the total value of the benefits they have promised would grow 22 percent, to $2.5 trillion. Only $1.7 trillion has been set aside to pay those benefits.

    No one can dispute the fact that public pensions are underfunded. But, my worry is that the underfunding issue will start a mass ideological attack on public pensions and the people who deserve decent pensions. The fact is that there is enough money to fund public pensions IF we returned to a more progressive taxation system. I like to point this fact that I learned: if New York State went back to the tax system it had in the 1970s, 95 percent of the people would see their taxes lowered and five percent--the richest people in the state--would have their taxes go modestly up--and New York would have an additional $9 billion in revenues. I'm hoping that Walsh, in the coming pieces in the series, makes that point. But, I worry she won't.

Comments

[Sayitaintso]

Might start a mass attack on public pensions?
Might?
Start?
Welcome to my world.

Pay-cut follies offer high drama
By Monica Yant Kinney
Inquirer Columnist
http://www.philly.com/mld/inquirer/news/local/14820285.htm
Judging by my in-box, many fell for the political stunt. Barely a day has gone by without e-mail quoting editorials heralding Sweeney and Moriarty as gutsy geniuses.

They're not just public servants. They're superheroes fighting overindulged office drones in the name of keeping the sales tax down - at least through the next election cycle.
http://www.trentonian.com/site/index.cfm?newsid=16775323&BRD=1697&PAG=461&dept_id=44551&rfi=8