Cartoon photo of Greece
California politicians are hoping to scam their citizens – again!
All private sector employers in California who don’t already have a retirement fund set up for workers will be forced to put aside 3% for every worker in a state-run retirement system.
Governor Jerry Brown signed the California Secure Choice Retirement Savings Trust Act last year and it has preliminary approval. It’s a $6.6 billion fund to cover 6.3 million private-sector employees in California who do not have retirement plans at work.
Employees can opt-out but employers can’t.
California officials claim there will be no taxpayer liability. They are guaranteeing that all withheld funds plus meager investment gains will be available for distribution at retirement age.
Even though the gains promised are meager, no one can guarantee investment gains. The fund won’t make any money in this economy and someone will have to make up the difference. That someone will be taxpayers despite their claims.
The fund will cost money to run and the government will no doubt charge employers fees to manage the system.
The mobster politicians will take that money and use it to pay bills they run up.
It will be a new source of liability for employers. Employers won’t enjoy working with the California government. California consistently polls as the 50th worst state to do business in.
Over the last 15 years, California ranks as the third worst state in the country in terms of job migration, with a net outflow of jobs that is 1 percent greater than the flow of jobs into the state, according to the National Establishment Time Series database.
It’s no wonder.
California is the state that recently rescinded a 20-year old tax break that was used to lure startup businesses to California.
The California Franchise Tax Board rescinded the tax break dating back to 1993. The tax was a business exclusion that allowed businesses to exclude or defer 50% of the profits of sold stock from their personal income taxes.
The franchise board is not only taking it back but they are also charging the interest and penalties retroactively to 2008.
Business owners owe money and fines for taxes they never knew they would ever owe. This is thievery.
Why have a private sector if it’s going to be controlled by the government and a corrupt one at that?
Laurence Fink, head of the world’s largest asset manager, said employers should be made to put money aside for their employee’s retirement as they do in Australia. In Australia, employers put 9% of a part-time and full-time employee’s income into accounts that are controlled by the workers. The important point here is that it is controlled by the workers.
Down the road, people are going to be dependent on the government and that’s a serious problem. It might be a good idea to have mandatory retirement accounts, but having the government manage it, as they are attempting to do in California, is just asking for another social security system with an empty lockbox. It will become another ATM for the government power brokers.