Dallas police and firefighters were once promised earlier retirement ages and plentiful pension benefits. Now that the Dallas Police & Fire Pension System (DPFP) is horribly underfunded, these promises are much harder to keep. Due to colossal mismanagement, city officials and plan administrators had to urgently find a way to save this broken system before it’s too late.
Thankfully, H.B. 3158, unanimously passed by the state legislature, aims to get the fund back on solid footing by increasing worker and taxpayer contributions, raising the retirement age, restructuring the plan’s governance, and significantly cutting on the post-retirement benefits.
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If the point of Social Security is to take money from the poor to give to the rich, it’s working.
As the young pay Social Security taxes, the old collect benefit payments and live in relatively low poverty. The poverty rate for those aged 18 to 64 is 13.6 percent, nearly 50 percent higher than the 9.5 percent rate for those over age 65, according to the Census Bureau. Those aged 65 to 74 live in even lower poverty at 8.3 percent. Americans 75 and older are still less impoverished than working-age Americans at 11.2 percent.
The average federal tax rate paid by elderly households is 13 percent, according to the Congressional Budget Office. For the lowest fifth of income earners, elderly households pay an average rate of 1.6 percent. Meanwhile, non-elderly childless households pay an average effective federal tax rate of 20 percent, with the bottom fifth paying 7.7 percent. Non-elderly households with children pay lower average tax rates due to child tax credits, deductions and exemptions.
The elderly typically have lower incomes than some working age groups, but they have had decades and decades to build up savings and financial assets to live off of. The young, who finance Social Security, lack that advantage.
One major issue with Social Security is the way it’s funded. Workers pay Social Security taxes that go into a Social Security Trust Fund, and the money in that Trust Fund is disbursed to the elderly. This often leads people to say they paid into the system and deserve full benefits. However, just because Social Security taxes are paid into the system does not mean that retirees receive the same amount they paid in. Benefits are calculated according to income levels, but current workers fund Social Security payments for current retirees, not their own retirement in the distant future. The money that current retirees paid into the system was spent years ago because the program was flawed from its creation.
Read the rest at the Washington Examiner…
Advocate Julian Adorney was published in FEE’s The Freeman on whether economic freedom alleviates poverty.
As we approach the 50th anniversary of the War on Poverty, legislators would do well to bear these data in mind. The cure for poverty is not more well-meaning government programs to make the United States resemble Europe. The solution, as it has always been, is more economic freedom.
Read the rest of the piece here.
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