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33 Tax Foundation's Tax Review 1 (1972)

handle is hein.tera/tafoutaxt0036 and id is 1 raw text is: Tax Review J 1972 Vol. XXXIII, No. 1. Public Pensions: Growth and Impact By Hon. Martha W. Grifiths U.S. Representative from Michigan I became tremendously interested in the field of public employee pensions when I looked at what a pension was going to cost me, a Congressman, and what the same amount of annual income would cost my husband, as a lawyer. At the present time, a Congressman pays $3,400 a year after taxes into the pension system. At the end of 20 years, if the Congressman is 60, he or she can draw a little more than $20,000 in pension, with approximately a $12,000 survival right. But, for a privately employed person who has no pension system except what he can save, such a pension income would have cost approximately $500,000 in investments. This would mean that over a period of 20 years he would have to save, after taxes, something like $25,000 per year as opposed to $3,400. Now, frankly, I think that that is terribly unfair. But once you begin to look at it, then I think you have to ask yourself exactly where public employees are going on the pension route, and so I have attempted to examine it in some degree, because in my judgment, this is one of the things that is destroying America's cities. Before I leave the problem of the Congressman, I would like to reveal to you two other things that Congressmen receive, or at least three other things. Before Congressmen were paid any substantial amount, there was written into the laws a burial fee Copyright 1972 by Tax Foundation, Inc., 50 Rockefeller Plaza, of $2,500 for a Congressman. At the time it was done it was probably necessary because, on the amounts Congressmen collected, they could hardly afford to bury themselves. Secondly, the widow or other survivor was given a year's salary. Then, we put into effect an insurance system so that at a very low rate, a named beneficiary can get a year's salary, which means that for the aged and ailing who are now in Congress it would de- New York, N.Y. 10020, Judson 2-0880 I