the old links from 2008 was a different economy, and SS is not in really in trouble now. OTOH, states are killing public employees right now by reducing benefits, increasing contributions (despite promises when hired), and simply not honoring collective bargaining agreements with people who worked for every penny.
Bernie's insane plan to tax transactions opens the door for a big losses of retirement going to public workers. My union analysis makes Bernie the last candidate to endorse simply because of the Robin Hood tax.
http://www.sanders.senate.gov/download/collegeforallsummary/
Fully Paid for by Imposing a Robin Hood Tax on Wall Street. This legislation is offset by
imposing a Wall Street speculation fee on investment houses, hedge funds, and other speculators of
0.5% on stock trades (50 cents for every $100 worth of stock), a 0.1% fee on bonds, and a 0.005%
fee on derivatives. It has been estimated that this provision could raise hundreds of billions a year
which could be used not only to make tuition free at public colleges and universities in this country,
it could also be used to create millions of jobs and rebuild the middle class of this country.
http://www.thedailybeast.com/articles/2015/05/31/why-free-college-is-really-expensive.html
Why Free College is Really Expensive
Everyone knew Bernie Sanders would propose a tax on Wall Street. But spending that money on college tuition is a cynical handout to the upper-middle class.
Even Sanders himself, however, lists the Robin Hood tax as an afterthought; after all, if you raise a Robin Hood tax you can do a long list of things with the money you get from it (including cutting other taxes, or spending on other initiatives). The emphasis from Sanders’ statements is where the money will go: paying for tuition for public colleges.
The first problem with Sanders’ proposal is that a national tuition subsidy will be counterproductive even on its own terms. The proposal will cut the economic legs out from underneath innovations such as open online courses, which may be on the cusp of delivering low-cost, high-quality college education for all. Organizations trying to deliver radical new models will now have to compete against a $70 billion subsidy for the old system.
Additionally, directing that much guaranteed money into a system is a sure-fire way to accelerate cost inflation. The state may pick up the tab for tuition, but students will still have to pay for ancillary services (such as room, board, textbooks, etc.), and those services will go up in price. These costs are not trivial; for instance, although Sweden has abolished college tuition, students graduate with more debt than students in the United Kingdom, and only slightly less than students in the US. Through economic incompetence, Sanders’ proposal might hit the jackpot of reducing college quality while also increasing cost.
Economically bad policy design from Sanders is not surprising. After all, the man is a self-declared Socialist. His appeal was not policy wonkery; as a protest candidate, Sanders (we hoped) would at least identify the right issues, even if his solutions were unworkable. In this case, Sanders has pointed out the wrong problem.
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https://www.reddit.com/r/PoliticalDiscussion/comments/36vmm8/what_are_some_legitimate_arguments_against_bernie/
[–]DeadMonkey321 50 points 12 days ago*
Apparently (according to a tax lawyer who was running around one of the earlier threads), there was no exception for 401k's, meaning that every time the mutual funds in your retirement fund rebalance, which should be a few times a year, you're paying a tax and losing money from your retirement.
Edit: just used the calculator found here to calculate the costs of 0.5% over 40 years assuming you were investing just $5500/year (the max allowable to an IRA). Using these assumptions, this tax would cost you, the average investor, $157,000 over the 40 years you're investing. This is money that I'm sure you'd prefer going towards your retirement.
Note: this isn't 100% accurate as I'm treating this as an addition to the expense ratio which isn't totally correct, but it's a ballpark figure to give the tax some context
http://www.dailykos.com/story/2015/05/29/1388484/-Bernie-Sanders-big-idea-has-a-math-problem#
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Bernie Sanders' big idea has a math problem
The tax Bernie Sanders is talking about is pretty much like a sales tax on certain financial market transactions. I don't know the exact rate Bernie included in his bill, but the Robin Hood Tax group calls for a rate of 0.5%, or one-tenth the average state sales tax. Given that the total value of transactions in the stock, commodity and various other financial markets numbers in the trillions of dollars annually, the idea that this tax could generate enough to pay for sending young Americans to college would seem reasonable.
For example, such a tax on the $550+ billion spent on stock buybacks by the S&P 500 in 2014 would yield $2.75 billion in taxes. That's just shy of 2% of the total needed and stock buybacks are about the least productive use of corporate funds: American companies are substituting these buybacks for investments in their companies that might produce real growth instead of an illusion. Of course, they do increase the value of executive bonuses and stock options...
But wait! That's a huge chunk of change being taxed to yield only a tiny percentage of the amount Bernie Sanders thinks the market would generate.
The truth is that in order for a financial transaction tax to generate $300 billion at a 0.5% rate, the total amount of taxable financial transactions would have to be $60 trillion. Even at the average sales tax rate of 5%, the amount of taxable transactions has to be $6 trillion annually.
Just to generate enough to pay for public college tuition, the taxable amount has to be at least $29.2 trillion. And that's if nobody comes up with schemes to legally (or not) avoid the tax.
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I just looked at NY, AZ, WI, CA, etc..these funds are often public employees represented by unions. This money is hard-fought. It's collected and invested for decades by whatever office each state sets up - in Florida it's almost 200 billion invested by a staff of 200 who are constantly buying, selling, and trading. Also, some funds are in the hands of large private investment companies. They clearly complete transactions everyday, which include stocks, bonds, real estate, derivatives, commodities. Most of the time, no type of investment is out of bounds unless the state or controlling board specifically limit them. Those investments would be TAXED by Bernie's transaction tax. That retirement money is earned by public employees, often union members: teachers, professors, police, firemen, city employees, social workers, park rangers, etc. Every penny that fund doesn't contain, is a penny that labor has to fight over.
For example, you can see in AZ the following allocation:
Equity/Stocks: 58%
U.S. Equity: 26%
Non-US Equity: 24%
Private Equity: 8%
Fixed Income: 25%
U.S. Fixed Income: 15%
Private Debt: 10%
Inflation Linked Assets: 12%
Real Estate: 10%
Commodities: 2%
https://www.azasrs.gov/content/asset-allocation
https://www.osc.state.ny.us/pension/overview.htm
http://www.calstrs.com/investments-overview
http://www.sbafla.com/fsb/
The State Board of Administration (SBA) was created by the Florida Constitution and is governed by a three-member Board of Trustees (Trustees), comprised of the Governor as Chair, the Chief Financial Officer and the Attorney General.
The Trustees, in concert with legislative directives, have ultimate oversight. They delegate authority to the Executive Director/Chief Investment Officer to carry out the strategic direction in the day-to-day financial investments and operations of the agency. The Executive Director/CIO manages approximately 190 professional investment and administrative support staff.
The SBA is required to invest assets and discharge its duties in accordance with Florida law and in compliance with fiduciary standards of care. Under state law, the SBA and its staff are obliged to:
Make sound investment management decisions that are solely in the interest of investment clients.
Make investment decisions from the perspective of subject-matter experts acting under the highest standards of professionalism and care, not merely as well-intentioned persons acting in good faith.
http://chronicle.com/article/Bernie-Sanderss-Charming/231387?cid=megamenu
July 6, 2015
Bernie Sanders's Charming, Perfectly Awful Plan to Save Higher Education
By Kevin Carey
Bernie Sanders, the self-described socialist senator, Internet hero, and apparent front-runner in the race for second place in the 2016 Democratic presidential campaign, has ideas about higher-education reform. Like the man himself, they are bold, charmingly utopian, kind of weird, and most important for how they might eventually move the boundaries of mainstream political culture.
Sanders wants every student in America to be able to attend a public college or university without paying tuition. Legislation he proposed to that effect a few weeks ago includes a reasonably plausible mechanism of multibillion-dollar federal subsidies and new regulation of state spending. The current Congress, it is safe to say, will not soon be passing such a bill.
But in trying to define a new fiscal federalism for American higher education, Sanders has sparked a conversation that is likely to expand. Without something like the Sanders plan, the disgraceful dismantling of public higher education, underway in many states, will certainly continue.
The no-tuition part of the Sanders plan attracted a great deal of attention, aided by canny headline writers who understand that "Bernie Sanders" is catnip for social media. Less discussed was the corollary part of the plan: In exchange for billions of new taxpayer dollars, the federal government would enforce a specific vision of what a high-quality college education means.
States would have to promise that, within five years, "not less than 75 percent of instruction at public institutions of higher education in the State is provided by tenured or tenure-track faculty." In addition, any funds left over after eliminating tuition could be used only for purposes such as "expanding academic course offerings to students," "increasing the number and percentage of full-time instructional faculty," providing faculty members with "supports" such as "professional development opportunities, office space, and shared governance in the institution." States would be prohibited from using the money for merit-based financial aid, "nonacademic facilities, such as student centers or stadiums," or "the salaries or benefits of school administrators."
to the awesome DU poster, woomewithscience
= new reply since forum marked as read
