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Originally Posted by Jim & Susan  I have another question. If GM folds, why would I then have to pay $100 billion to their former employees in the form of pensions?
Jim |
Well if you've got it then Jim, why not?
Maybe it's so the old people could still eat and live and because their retirement was part of their earnings for work already rendered. It's not like they can go back and get the job either. I imagine it's something akin to the government guaranteeing your money will be available for you from your bank. ???
Anywho today's news from the Motor City state of Michigan is that the state unemployment fund is out of money.
Here's the explanation as to why,
"Each year, the first $9,000 you make brings a tax on your employer to pay unemployment benefits.
Nearly a quarter million Michigan companies pay into the fund and in a good year, it adds up to about $1.5 billion half dollars.
When a company’s layoffs exceed taxes paid they’re known as negative balance employers.
Right now, Michigan has 33,000 negative balance employers.
There will be a need for millions more if thousands of job cuts come from a possible General Motors Chrysler merger.
In order to re-pay the loans, the state will raise taxes on the negative balance employers, starting in January. It amounts to about $68 per employee.
The state will also raise unemployment taxes on businesses laying off the most employees to take care of the loan balance."
I am assuming the government isn't interested in the companies profits or the salaries of the CEOs but subsidies would be for the benefit of the impact on the population of the state.