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Edward Ring

How the Tax System Favors Government Workers and Punishes Independent Contractors

The 2016 tax filing deadline is now just one month away. Which makes it timely to point out how unfair our tax system is to middle class workers who want to prepare for their retirements. It is also timely to explain how there is a completely different set of retirement rules, far more favorable, that apply to unionized government workers.

If you are a member of the emerging “gig economy,” or a sole proprietor running a small business, or an independent contractor, and if you are reasonably successful, then you paying nearly 50% of every extra dollar you earn in taxes. The following table showsthe marginal tax burden for independent contractors who earned more than $81.5K and less than $118.5K in 2015:

Marginal Tax Rate for Independent Contractors (for 2015 earnings > $81.5K and < $118.5K)

The challenges posed… Read More

Edward Ring

Why Middle Class Private Sector Workers Are NOT “Ripping Off the Next Generation”

A few months ago UnionWatch published an editorial entitled “Social Security is Healthy Compared to Public Sector Pensions.” The highlights offer compelling evidence of two very distinct categories of “middle class workers” in America:

“According to theU.S. Census Bureau, in 2030, when Social Security will be supposedly approaching insolvency, there will be 99.4 million citizens over 58 years old, and 59.5 million citizens over 68 years old. This means that by 2030 (assuming no public employeesalsoparticipate in Social Security – which many of them do) there will be 19.9 million government retirees collecting pensions that average $60,000 per year, and there will be 47.6 million private sector retirees collecting Social Security benefits that average $20,000 per year. Using these assumptions, the total pension payouts to government retirees, who were only 20% of the workforce, will be $1.2… Read More

Edward Ring

Social Security is Healthy Compared to Public Sector Pensions

Last week yet another missive on the lessons to be learned from Detroit’s bankruptcy was published, this time in Forbes Magazine by Jeffrey Dorfman, an economist at the University of Georgia. Dorfman’s article, “Detroit’s Bankruptcy Should Be A Warning To Every Worker Expecting A Pension, Or Social Security,” clearly implies that future Social Security benefits are as financially imperiled as public sector pensions.

This is patently false, and spreading this falsehood has dangerous consequences.

Not only are the financial adjustments necessary to fix Social Security far easier to implement than what it’s going to take to rescue public sector pensions, but the sheer size of the public sector pension liability is actually bigger than the total liability for the entire Social Security fund. It is imperative that American voters understand this fact.

In the United States today about 20% of workers are employed by the government (or public utilities that offer benefits on par with… Read More