RE: pensions and the stock market

["Max Sawicky" <sawicky@xxxxxxxxxxxxxxxx>]

My impression from a distance is that firms can
back pension surpluses/losses into their profit
totals, so there would be tax consequences.  But
not necessarily budget consequences, since corp
taxes are a small share of total revenues and not
a big factor in revenue growth and budget surpluses.

The surplus, net of inflation-adjusted spending
growth, is being moved up from $4.6 to over $5 trillion
over the next 10 years.  It hasn't begun to disappear yet.
There's plenty of money for a progressive tax cut.

mbs




I have a question about pensions.  A couple days ago, the Wall Street
Journal had article about companies' manipulations to lower pensions.  I
suspect that the massive stock market run-up had a major impact in
creating surpluses for many pension plans.  Now that some of those
surpluses are disappearing, what will the impact be?  Lowering benefits or
a reduction in profits to make good the disappearing surplus?
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx