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Groups who advocated for the IRS to prepare tax returns sure look foolish these days: http://t.co/oKvpIofu7Y
May 13, 2013 06:30 PM
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"We don't need the federal government mandating additional taxes..." -@MarshaBlackburn on MFA: http://t.co/lAuLJtr5t3 #NoNetTax
May 13, 2013 06:00 PM
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Health insurers and businesses are already feeling the iron-clad grip of regulations in #Obamacare: http://t.co/J6dfnKqFYZ
May 13, 2013 05:30 PM
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Virginia Governor Bob McDonnell Signs Largest Tax Hike in Virginia History into Law http://t.co/Qd6KOFfaPv
May 13, 2013 03:46 PM
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Under #Obamacare, mothers have had a tougher time purchasing non-prescription, over-the-counter medicine: http://t.co/dJuaGAT9LE
May 13, 2013 02:01 PM
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9 out of 20 #Obamacare tax hikes have not even been implemented yet: http://t.co/opFkyf1guJ
May 13, 2013 01:30 PM
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.@GroverNorquist on MFA: "[The Senate] didn't ask all of the questions that needed to be asked": http://t.co/wXfkIR2Ca9 #NoNetTax
May 13, 2013 01:01 PM
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"When architects of #Obamacare are worried about it creating a trainwreck, you know something's gone terribly wrong": http://t.co/J6dfnKqFYZ
May 13, 2013 12:30 PM
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Conservative and Free Market Groups Applaud Move to Delay a Vote on Gina McCarthy: http://t.co/lNQYmJAB12 #EPA
May 13, 2013 12:02 PM
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The #Obamacare train wreck will derail the American economy: http://t.co/opFkyf1guJ
May 13, 2013 11:30 AM
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Cap and Tax Bad for
Government Employee Pensions
Reports indicate that some in Congress are prepared to offer versions of a "cap and tax" scheme next week. This new tax would be assessed on all fossil fuel-derived energy source in America. Because people (not businesses) pay taxes, this will be passed along to consumers and shareholders.
When you hear "shareholders," you might just be thinking of those with stock in taxable brokerage accounts, or even your IRA or 401(k) account. But there's a whole other group of people who will also be hurt by this bill--government employees with defined benefit pension plans.
According to the Employee Benefit Research Institute, there are 2,654 defined benefit pension plans offered by state and local governments. They cover 14.5 million working participants, and 4 million retirees and beneficiaries. There are $3.3 trillion in assets, and they paid out $162 billion in benefits in 2007.
Assuming that the pension funds are 60 percent stocks and 40 percent bonds (the typical breakdown for such plans), these funds have $2 trillion invested in stocks.
Assuming the stocks break down the same way as the S&P 500 Index, here is how the following sectors directly-taxed by the cap and tax scheme break down, with the amount of assets held in the plans:
- Utilities: $73 billion (4 percent of the stock market)
- Energy: $220 billion (11 percent of the stock market)
Of course, all sectors will be hit by cap and tax, but it's important to note that 15 percent of the entire stock market (and, by extension, 9 percent of the total value of defined benefit pension plans) will be directly-hit by cap and tax.
Posted by Ryan Ellis 
on Friday, April 23, 2010 5:36 PM EDT
on Friday, April 23, 2010 5:36 PM EDTTo follow Ryan Ellis's RSS feed click here. To follow them on Twitter, their handle is @ryanlellis
