When my Dad retired from IBM many years ago, they used to give cost of living increases to help maintain a reasonable standard of living. Now, most of us have declining health with greater financial burdens. I would like to see our new CEO take a look at our situation and perhaps offer some relief. I certainly wish those that are really hurting the best of luck in their remaining years. There is always a chance something good will come along.
The only COLA you get will be the one you buy at the gas station. At the end of 2015, expect all IBM supplied medical coverage to go away.
During my career - ending in 1990, a commitment by IBM, or an IBMer, was solid. An employee or manager could be fired for making one he didn't intend to keep.
What happened in 1999 hit me like a ton of bricks. It was as if I found out that my wife had been a whore in the tenement district for ten years, and that everybody knew it but me.
FYI, IBM wasn't only the leader in the destruction of the social contract that built the US economy from 1945 through 1970; it's now in the business of metastasizing that loathsome relationship as its business model.
The factory will make newer products including its ThinkPad Tablet 2 and its ThinkCentre M92p Tiny desktop, the company said. It won't be making the first wave of Tablet 2's, however, which are expected to go on sale later this month.
Cons: Salary is an issue and I have seen many excellent IBMers leave the company because they can achieve significantly higher salaries elsewhere. Also, there is no pro-active 121 help with career advancement and I have lost count of the number of times a manager has told me that it is the individual's responsibility to further their own career, but this is very difficult in a company the size of IBM, since you need help from other people to advance. If you are female and planning to take time out to have a family, be prepared for your career to stagnate, there is no mechanism in IBM to give women returning to work a leap forward and this can be very demoralising.
Advice to Senior Management: Increase base salaries before you lose some of the great talent the company has spent years nurturing. Implement a managed back to work boost service from HR for women returning to work after having a baby.
In planning for your retirement, it’s important to check the statement at least once a year because it lists your lifetime earnings according to Social Security’s records. And a question I received from a reader is a good reminder why you need to keep checking the statement. She wrote: “I got some sort of yearly statement from the SSA listing the number of years of my employment and estimated benefit amounts I’d be eligible for. But I never really paid attention to the statement. Upon examination, I notice that I’m only being credited with about a third of the years I actually worked. Is it possible to get this corrected with Social Security?”
The NFL locked out its referees in the name of taking away their pensions. It was not that the pensions were a threat to the long-term fiscal survival of the league—again and again, we were reminded that the sums involved were pocket change in a growing, multibillion-dollar enterprise. It was that the pensions existed at all. The mere existence of a defined-benefit retirement plan offended an ownership class that had looked around and seen that every other business owner in America had already broken that particular contract.
It’s worth reading Cragg’s piece in its entirety for its eloquent defense of traditional pensions. ...
Companies have been freezing or terminating their traditional pension plans for some time. Typically when companies stop their defined benefit plans, they offer a 401(k) plan to their employees, often with the promise of employer contributions. This is the type of arrangement that the NFL and the referees agreed to. However, the employer contributions aren’t required and can be rescinded at the employer’s whim, with little or no reason. Often, employers suspend their contribution during times of financial hardship, just when the people participating in these plans need it the most.
Many employers are freezing their pension plans, which stops the accrual of new benefit obligations. ...
But what all these approaches are bringing home is that, bit by bit, the nation's employment-based defined benefit plan system is withering away, as the actions being taken by these employers are a way to better manage benefits already promised — not an expansion of additional or new obligations. ...
And as for Congress, we are hard-pressed to think of a single step lawmakers have taken to encourage the maintenance of defined benefit plans, aside from its action on cash balance plans. We hope the new Congress takes such an examination while there are still such plans left.
Consider this example from an annual report from Fidelity Investments: For a 65-year-old couple retiring this year, the cost of health care in retirement will be $240,000, 6 percent more than that same couple retiring in 2011 would pay. The report assumes that the man will live 17 years and the woman 20.
“Most people don’t realize Medicare covers much less than traditional employer plans,” Sunit Patel, senior vice president in Fidelity’s benefits consulting group. “The $240,000 number captures the Part B premium for physician services, Part D for prescription drugs. Then there are deductibles and coinsurance, and benefits that are not covered like vision exams, hearing aids.”
Another study, this one from Nationwide Financial, found that people who were near retirement routinely and wildly overestimated the percentage of health care costs covered by Medicare. It covers only 51 percent of health care services, according to the Employee Benefit Research Institute.
"Hodad" is an acronym for "hands of death and destruction": Despite his Ivy League credentials and board certification, the surgeon had an unfortunate tendency to botch operations so badly that patients often suffered life-threatening complications. But he was also one of the surgeons most requested by patients, including celebrities, thanks to his charming bedside manner and their lack of understanding about what caused their post-op problems.
Makary, 42, aims to end the professional code of silence that allows colleagues like Dr. Hodad to thrive. Now a cancer surgeon at Johns Hopkins Hospital in Baltimore, Makary has just published the book Unaccountable: What Hospitals Won't Tell You and How Transparency Can Revolutionize Health Care. ...
In no U.S. state can patients find out what a surgeon's rate of complications is, how many mistakes a hospital makes, how many avoidable deaths it has or almost anything else about a provider's record of care. Most ratings, from magazines to websites, reflect softer metrics. In the closely watched hospital rankings issued by U.S. News & World report, "reputation," or what specialists think of a hospital, counts 32.5 percent toward overall scores. Patient volume, number of nurses, use of advanced technologies and 30-day mortality rates also count.
The former Massachusetts governor's advisers say he would accelerate the use of high-deductible insurance plans that offer lower premiums but require beneficiaries to pay thousands of dollars more in out-of-pocket expenses than they would face under conventional coverage.
Romney's overriding aim is to create a much bigger retail market in healthcare, with transparency on pricing and services, more flexible insurance pools and interstate insurance markets.
That would allow consumers to choose up front what products and services to buy and from whom, according to the Romney campaign. But consumers would cover most routine medical expenses themselves, including annual check-ups, with assistance from health savings accounts and new tax breaks intended to align the private markets for group and individual insurance that cover more than 160 million people. ...
Romney's approach is a political departure for him. In Massachusetts, he oversaw the passage of comprehensive state healthcare changes that later became the model for "Obamacare," the president's federal program. ...
Romney's new incentive-based strategy also could hold pitfalls for consumers. Analysts say the use of heath savings accounts favors the affluent, while statistics indicate that high-deductible plans can mean big out-of-pocket costs for people with lower wages and little disposable income.
Above all, there’s this:
MR. ROMNEY: Let — well, actually — actually it’s — it’s — it’s a lengthy description, but number one, pre-existing conditions are covered under my plan.
I guess you could say that Romney’s claim wasn’t exactly a lie, since some people with preexisting conditions would retain coverage. But as I said, it’s the moral equivalent of a lie; if you think he promised something real, you’re the butt of a sick joke.
And we’re talking about a lot of people left out in the cold — 89 million, to be precise.
In theory, that should thrill Republicans, who have been eager to run against an incumbent who unwittingly gave his name to a healthcare plan, "Obamacare," that has engendered more opposition than support.
So why has explaining his position on healthcare been such an ordeal for Romney? ...
Asked on CBS' "60 Minutes" what he would do about Americans who lack health insurance, Romney replied that the country already had a system in place for them: emergency rooms. "We pick them up in an ambulance and take them to the hospital and give them care," he said.
That answer flew in the face of universally accepted wisdom that ERs are the most expensive places to provide routine care, and also contradicted Romney's own statements. Two years ago, he said in another televised interview: "Look, it doesn't make a lot of sense for us to have millions and millions of people who have no health insurance and yet who can go to the emergency room and get entirely free care, for which they have no responsibility."
Either of those might be dismissed as slips of the tongue, or perhaps defended as statements of fact that Romney didn't intend as road maps of policy. What has been more difficult for Romney has been crafting a message about Obamacare that doesn't implicitly disavow his own plan in Massachusetts, which has inevitably come to be known as Romneycare. ...
His criticism of Obamacare rests on the idea that it is an overreach by the federal government — a "risky federal takeover of healthcare" — into policies best enacted by states. It's a nuanced argument that may be lost on voters who reason that what's good for a state should also be good for the country. And in substance, Obamacare and Romneycare are quite similar. "They're not identical twins, but they're probably fraternal twins," said Henry Aaron, a healthcare analyst at the Brookings Institution.
The Romney plan was the first in the country to rely on the device known as an individual mandate, requiring virtually everyone to buy health insurance or face a fine. The system relies on this logic: Only when everyone jumps into the insurance pool, including the healthiest people, is it possible to afford coverage for the sickest people, including those with preexisting conditions.
Although accounts differ as to who first came up with the idea, the mandate was prominently pushed by the conservative Heritage Foundation in the 1990s as a free-market alternative to socialized medicine. By the time Romney crafted the Massachusetts plan, it was beginning to win support on both sides of the aisle as a practical way to bridge the ideological divide and accomplish universal coverage.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
First, let’s get a few things straight. Social Security is solvent. It’s America’s most successful retirement plan to date. It’s extremely popular across party lines. Social Security adds not a penny to the deficit. And, as Nancy Altman has argued, it's “the poster child for fiscal responsibility.” The program is prudently managed, cost-effective, and carefully monitored.
Obama could have mentioned these facts and cheered the success of a program that Democrats – and all Americans -- should be proud of. Instead, the discussion went like this:
“Lehrer: Do you see a major difference between the two of you on Social Security?
Obama: You know, I suspect that, on Social Security, we've got a somewhat similar position. Social Security is structurally sound. It's going to have to be tweaked the way it was by Ronald Reagan and Speaker -- Democratic Speaker Tip O'Neill.”
Ladies and gentleman, that was the sound of your president offering to screw you on your retirement. This revealing exchange was followed by some politically strategic talk by both candidates about how current retirees shouldn’t be worried, because, as we all know, their votes are needed in the short term. But the rest of us? Be very, very worried.
Hearing the selfishness implicit in telling voters who would not be immediately injured by slashing Social Security and turning Medicare into a voucher playground for corporate health insurance interests was surely a poor demonstration leadership. What happened to the contrast between voting for the “Me First and Me Only” candidate and the candidate who said “We’re All in This Together?” I was offended and outraged to have both of these men say that I could stop listening. They may as well have said, “You’ve got yours, and you don’t care about your kids and grandkids, so vote for me. I won’t take away your safety net and you’ll be dead before the real harsh realities in injure your children and grandchildren.” ...
I care a lot. I want my kids and grandkids to have a better shot at life than I have had. I want them to have secure retirements with dignity and a truly universal healthcare system that places the value of life over the value of another buck. Wouldn’t it have been great if one of the candidates had launched into a discussion of a Robin Hood Tax? How about taxing Wall Street for the damage done on Main Street? How about acknowledging that I care and so do a lot of my near-retirement-age friends. And we’d like to see a truly forward looking revenue source to protect and strengthen a way of life that honors how hard we have worked.
Many private equity fund managers – general partners, in industry jargon – fear that there could be changes to the tax code if Mr Obama is re-elected. ...
General partners earn income from deals through “carried interest”, usually worth about 20 per cent of the fund’s annual profit, in addition to charging management fees.
Carried interest is taxed at the 15 per cent rate for all capital gains but the Obama administration has proposed changes that would see carried interest charged at the same rate as income, typically 35 per cent. ...
“The political rhetoric surrounding the presidential election certainly brought attention to many aspects of the tax code including carried interest,” said Steve Judge, president of the Private Equity Growth Capital Council. “The idea that capital gains treatment should only be available to those with money to invest would advance a policy that puts a higher value on financial contributions than vision, hard work and other forms of sweat equity.”
In a nutshell, the fewer deductions and other “tax expenditures” we have, the lower the rates can be. That part is simple.
The problem is that cutting rates is more popular than closing loopholes, especially those like the mortgage-interest deduction that are used by millions of taxpayers. But there is a possible solution.
I call it the modified Reagan 28 plan, or just the “28 plan” for short. It is a simple framework for thinking about tax policy. Though I’ve named it in honor of Ronald Reagan, it is similar in many ways to the ideas proposed by the Bowles-Simpson commission, which is a good starting point for any serious discussion of tax reform. ...
For this discussion, let’s define a household as rich if its income exceeds $1 million a year. In fact, my plan applies only to the income such households earn above that threshold. And I can state my idea in just one sentence: All income above $1 million a year for a household will be taxed at 28 percent. There are no deductions, and all income, including capital gains and dividends, is included. President Reagan favored something like this approach. His 1986 tax plan also taxed dividends and capital gains at the same 28 percent rate, as would the Bowles-Simpson proposal.
While we’re at it, let’s make the corporate tax rate 28 percent, too, because our current rate is high by international standards. Oh, and the estate tax exemption? On amounts above $3.5 million for individuals, the rate would be, of course, 28 percent.
What would this plan accomplish? First, by establishing the same marginal rate on all income sources, the incentives disappear for shifting from one source of income to another. Although there is much discussion about how taxes affect people’s willingness to work, most people don’t have much flexibility about how many hours they’re employed. For the rich, however, it can be relatively easy to switch income from a highly taxed category to one that is taxed at a lower rate. One reason that Mitt Romney’s taxes have been so low — he paid an effective federal income tax rate of only 14 percent in the two years for which he has disclosed his returns — is that venture capitalists have figured out a legal way for the incentive fees they receive to be treated as capital gains income, currently taxed at a rate of only 15 percent. If we tax all income at the same rate, these games will end.
Then California bled that system dry. Over three decades, voters starved their state -- and so their colleges and universities -- of cash. Politicians siphoned away what money remained and spent it more on imprisoning people, not educating them. College administrators grappled with shriveling state support by jacking up tuitions, tacking on new fees, and so asking more each year from increasingly pinched students and families. Today, many of those students stagger under a heap of debt as they linger on waiting lists to get into the over-subscribed classes they need to graduate.
California's public higher education system is, in other words, dying a slow death. The promise of a cheap, quality education is slipping away for the working and middle classes, for immigrants, for the very people whom the University of California's creators held in mind when they began their grand experiment 144 years ago. And don't think the slow rot of public education is unique to California: that state's woes are the nation's.
Mr. Romney, responding to opponents’ barbs about his use of overseas tax havens, has offered a narrow defense, saying only that the investments, many made through the private equity firm he founded, Bain Capital, have yielded him “not one dollar of reduction in taxes.”
A review of thousands of pages of financial documents and interviews with tax lawyers found that in some cases, the offshore arrangements enabled his individual retirement account to avoid taxes on its investments and may well have reduced Mr. Romney’s personal income tax bills.
But perhaps a more significant impact of Mr. Romney’s offshore investments has been on the profit side of the ledger — in the way Bain’s tax-avoidance strategies have enhanced his income.
Some of the offshore entities enabled Bain-owned companies to sidestep certain taxes, increasing returns for Mr. Romney and other investors. Others helped Bain attract foreign investors and nonprofit institutions by insulating them from taxes, again augmenting Mr. Romney’s bottom line, since he shared in management fees based on the size of each Bain fund. ...
Many of the details of the Romneys’ wealth — estimated at $250 million — remain hidden, partly because Mr. Romney has released only the last two years of his tax returns. Those returns show an effective tax rate of about 14 percent, because most of the earnings came from investments and are taxed at 15 percent, significantly lower than rates on ordinary income. ...
A variety of Bain funds in the Romneys’ portfolio have controlling stakes in foreign companies. Had those funds been set up in the United States, the Romneys and other American investors would probably have been subject to certain federal taxes for their ownership of “controlled foreign corporations.” Setting up the funds in the Caymans allowed them to avoid those taxes. ...
Bain and other private equity firms use a variety of mechanisms to help investors avoid those taxes, including setting up offshore “blocker” corporations, a practice that has been criticized in some circles and has prompted legislative efforts to curb it. These offshore corporations become a conduit for money for these institutional investors, as well as foreign investors looking to avoid United States taxes. ...
Individual retirement accounts, as tax-exempt entities, are subject to the “unrelated business income” tax. But people familiar with Mr. Romney’s investments said his I.R.A., which is managed by an independent trustee and is estimated to be worth between $21 million and $102 million, used offshore blockers to avoid the tax. Mr. Romney’s I.R.A., for instance, has millions invested in several Sankaty funds with onshore and offshore investment vehicles. His I.R.A. would have invested through the offshore funds, they said.
The $5 trillion figure derives from an estimate by the nonpartisan Tax Policy Center that the Romney tax cuts — without base-broadening offsets — would reduce revenue by $456 billion in 2015. Multiply by 10, and account for costs rising each year, and the $5 trillion estimate is probably low. ...
The Republican ticket says it could pay for its tax cut by eliminating loopholes. But the biggest loopholes are popular: the exclusion from taxation of employer-sponsored health insurance and the deductions for mortgage interest, charitable contributions and state and local taxes. Pressed by the assiduous Mr. Wallace about which of these Mr. Ryan would limit, the nominee pleaded a lack of time. “It would take me too long to go through all of that,” he said.
The GOP wants voters to think that only the rich would be affected by its loophole closing. “And don’t forget that the higher-income people have a disproportionate amount of the loopholes that they use,” Mr. Ryan said. Well, actually, no. Higher-income people reap a “disproportionate amount” of the benefit of lower rates on capital gains and dividends — households earning more than $200,000 a year receive 90 percent of the benefit. But the Romney-Ryan plan would leave that break in place. Most of the remaining major tax breaks flow primarily to households earning $200,000 or less. For example, more than two-thirds of the benefit of the deduction for home mortgage interest goes to those making less than $200,000 a year.
The latter group’s most prominent member is Mr. Romney himself, whose astonishingly low tax rates are made possible by finding and using every loophole and flaw in the code. What his tax practices show is not illegal or unethical behavior, but rather the unfairness of a tax system that provides its most outlandish benefits only for the very, very rich and savvy. What is worse is that Mr. Romney has proposed making this profoundly dysfunctional system even more unfair.
Some of Mr. Romney’s financial tactics are well-known, like structuring his income so that most of it is taxed at the low capital-gains rate of 15 percent, or stashing investments in tax havens like Switzerland or the Cayman Islands. (The Times reported on Tuesday that the use of these havens not only saved him money, significantly enhancing his sizable retirement account, but also helped his company attract foreign investments.) But other strategies are so obscure that they are only known to the very few who worry about passing millions to their heirs without paying transfer taxes. ...
Like most Republicans, Mr. Romney wants to eliminate the estate tax entirely, even though it currently applies only to estates of more than $10 million for a married couple. That would cost the treasury more than $1 trillion over a decade, but it would be a huge benefit for Mr. Romney’s heirs and for the other 0.3 percent of estates rich enough to qualify for the tax. Getting rid of the estate tax would subvert the gift tax (it was established as a backstop, to keep estates from being passed on before death) and would spare the rich all this complicated “estate planning,” which is just a euphemism for avoiding the tax.
As Warren Buffett has said, the estate tax increases equality of opportunity and curbs the movement toward a plutocracy. Mr. Romney’s plan to get rid of it, helping his family but few others, is one of the sharpest illustrations of his distance from ordinary Americans.
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