Since we have drifted into a discussion of government pensions...
Each state has a statistic called “unfunded pension obligations”.
Simply put, this number represents what is promised to retired state employees but is not in the state’s hands.
The numbers are very low with many states below 50% and others below 40%.
States cannot print money like the federal government can.
The only way to meet these obligations is to increase revenue.
That often means higher state income taxes.
The problem with that is income portability.
Many high income tax payers can choose to relocate to states with lower taxes.
When the exodus begins the tax payers who remain will need to pay more.
Citizens who pay little or no taxes and receivers of other state support, stay in their state.
The result is an acceleration of the problem until critical mass occurs.
Watch CT over the next decade.
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