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.
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!
OUTRAGEOUS!!! Their plan is no doubt to STEAL 401k accounts and only give people what Social Insecurity promises. It is inevitable that they take it one way or another since Social Security "Accounts" have NO MONEY. REPEAL the 16th Amendment and end government tyranny!
How can they say that 401(k)'s are costing the government $80 billion per year. I know those tax breaks are at least partially offset by the required minimum distributions of those over 70 1/2, not to mention other retired folks who are living off their 100% taxable distributions.
yup!! not your money!! I am working my @@@ off to have something to retire for while all the time fighting cheaters of the welfare system, politicians who earn more than they're worth and 'secret' provisions in almost every bill that is written and passed by these crooked politicians. they are all over from my little city to the huge government. What is a small person, like me, who works two minimum wage (which is another joke) jobs just to keep gas in my car and food on the table? education??!! Right… i have a diploma but there are NO JOBS left in this country that pay worth a [email protected]@@. Even the bill collectors aren't from this country !! they are from INDIA !!! Am i angry ??? You should be too. I gave my only son for the war in IRAQ. I have sacrificed enough in this life.
This is just another Internet rumor.
An econominst named Teresa Ghilarducci wrote a book proposing pension reform. Even if 401K programs were phased out, existing accounts would not be taxed, nor would anything happen to the balance.
@Frank Provasek: This is not an Internet rumor. You can call it a trial balloon, you can say the concept is not even in the planning stages, but you can not say that the news story was an Internet rumor.
Ghilarducci went in front of a House Committee and suggested the idea. She suggests taking tax breaks away from future "401k" dollars, and a couple of House members thought the idea needed to be looked at. The idea is to redirect the 401k dollars to a new government account that is managed by the Social Security Administration. It's MY money and I don't want the government's hands on it!
From the money.cnn.com interview linked above.
Again I do not want the government's hands on my retirement funding. No frigging way. They already have all of my Social Security money and I don't see them solving that problem.
This is NOT an Internet rumor. Ghilarducci is a socialist, wants to have the government manage mandatory savings accounts and give a crappy return rate. Am I expected to think that they would put my money in a personal lock box where I'm the only one with a key? If so, your dreaming.
We can extrapolate a right to choose to kill an unborn child from the Constitution but we can't extrapolate a right to private property.