Congress wants your 401(k) tax breaks back
This is unbelievable. Since Congress has totally screwed up Social Security and refuse to do a damn thing about it, now they are looking for more cash to fund their out-of-control spending. Since we know we can not depend on Social Security for our retirement, many smart investors are depending on 401(k) accounts, IRAs and Roth IRAs.
Author note: While I’m away from the computer, I’m republishing my top 20 posts from 2008 each afternoon. -Steve
All three offer tax breaks either now or in the future and get this, a couple of Democrats don’t think they are getting enough for their investment. Their investment? They have the gall to think that $80 million in tax breaks provided to 401k investors is an investment. It’s our damn money!
Hat tip goes to LGF for this one, and here is the original article in Workforce Week. My emphasis added in bold.
Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.
House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.
Under Ghilarducci’s [Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York] plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.
The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.
“I want to stop the federal subsidy of 401(k)s,” Ghilarducci said in an interview. “401(k)s can continue to exist, but they won’t have the benefit of the subsidy of the tax break.”
Under the current 401(k) system, investors are charged relatively high retail fees, Ghilarducci said.
“I want to spend our nation’s dollar for retirement security better. Everybody would now be covered” if the plan were adopted, Ghilarducci said.
It’s not your damn money to spend Ghilarducci.
The savings rate isn’t going up for the investment of $80 billion,” he [House Education and Labor Committee Chairman George Miller, D-Calif.] said. “We have to start to think about … whether or not we want to continue to invest that $80 billion for a policy that’s not generating what we now say it should.”
These politicians want to get their hands on your personal retirement accounts. This is money invested – 100 percent – by you and in many cases your employer. Since tax breaks are involved and the damn politicians need more money from you to give to others and spread the wealth, they clearly are considering just taking it from you.
If the tax breaks go away, employers will stop their contributions and many employees will stop investing their own money, but that’s OK, since the government will demand you invest 5 percent into government bonds administered by the Social Security Administration.
Are you kidding me?
Just wait. Do you think your Roth IRA investments will be safe from government hacks that think you don’t deserve to keep your own money? The return on your Roth IRA investments are currently 100 percent tax free, but I guaranty you that liberals will want to tax that money in the future since people will have invested and “gained more than their fair share” in the stock market.
Hot Air just posted, and James Pethokoukis at US News uses the socialism word. Watch out, you might be called racist.
Vicevich has it too.
Throw all the bums out!
"…required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation."
Isn't that how Social "Security" was supposed to be run in the first place? At least until the Democrats got ahold of it in the late sixties and turned it into IOU's? And yes, Republicans are complicit in this as well.
When Galveston, TX got out of the system (before they closed the loophole), they let people opt into a system where worker's money was invested in extremely conservative (no pun intended) investments. When compared to those who opted to stay in the SS system, the Galveston system retirees were taking home about 4 – 5 times as much monthly benefit as the SS Ponzi scheme. That's your government working for you!! Yay!
The biggest difference between SSI and a Ponzi scheme is that the Ponzi scheme can't legislate itself new "investors."
Madow will go to jail for misdirecting funds. Our congressmen will get relected even though they do the same thing on a grander scale. There is no justice. Throw the bums out.