Post by jgaffney on Oct 9, 2008 13:34:54 GMT -5
InvestmentNews.com has this:
A wide range of sweeping changes to the 401(k) system were proposed Tuesday at a hearing on how the market crisis has devastated retirement savings plans.
Chief among them was eliminating $80 billion in tax savings for higher-income people enrolled in 401(k) retirement savings plans.
This was suggested by the chairman of the House Committee on Education and Labor.
“With respect to the 401(k), it appears to be a plan that is not really well-devised for the changes in the market,” Rep. George Miller, D-Calif., said.
“We’ve invested $80 billion into subsidizing this activity,” he said, referring to tax breaks allowed for 401(k) contributions and savings.
With savings rates going down, “what do we have to start to think about in Congress of whether or not we want to continue and invest that $80 billion for a policy that is not generating what we … say it should?” Mr. Miller said.
Congress should let workers trade their 401(k) assets for guaranteed retirement accounts made up of government bonds, suggested Teresa Ghilarducci, an economics professor at The New School for Social Research in New York.
When workers collected Social Security, the guaranteed retirement account would pay an inflation-adjusted annuity under her plan.
“The way the government now encourages 401(k) plans is to spend $80 billion in tax breaks,” which goes to the highest-income earners, Ms. Ghilarducci said.
This is just wrong, on so many different levels:
I'm telling you, Obama's tax plan will not last 3 minutes in a Democrat congress. We're in trouble.
A wide range of sweeping changes to the 401(k) system were proposed Tuesday at a hearing on how the market crisis has devastated retirement savings plans.
Chief among them was eliminating $80 billion in tax savings for higher-income people enrolled in 401(k) retirement savings plans.
This was suggested by the chairman of the House Committee on Education and Labor.
“With respect to the 401(k), it appears to be a plan that is not really well-devised for the changes in the market,” Rep. George Miller, D-Calif., said.
“We’ve invested $80 billion into subsidizing this activity,” he said, referring to tax breaks allowed for 401(k) contributions and savings.
With savings rates going down, “what do we have to start to think about in Congress of whether or not we want to continue and invest that $80 billion for a policy that is not generating what we … say it should?” Mr. Miller said.
Congress should let workers trade their 401(k) assets for guaranteed retirement accounts made up of government bonds, suggested Teresa Ghilarducci, an economics professor at The New School for Social Research in New York.
When workers collected Social Security, the guaranteed retirement account would pay an inflation-adjusted annuity under her plan.
“The way the government now encourages 401(k) plans is to spend $80 billion in tax breaks,” which goes to the highest-income earners, Ms. Ghilarducci said.
This is just wrong, on so many different levels:
- You remember George Miller. He was the champion in the House of the No Child Left Behind bill. So now, what he did for education, he wants to do for retirement.
- You'll notice the language where Congress has to "spend" $80 million dollars. That's tax revenue that is not collected on deferrals to 401(k) plans. Only in a Democrat Congress can money that is left in the private economy be scored as a "cost" to government.
- Even if my 401(k) plan is currently losing money, I am confident that the market will come roaring back before I retire. Meanwhile, the return on government bonds will remain stagnant.
- This is a thinly-veiled plan to capitalize what Miller already knows is the coming tidal wave of debt when the baby boomer retirement surge hits, and all that money that Congress has been "borrowing" from the Social Security Trust Fund comes due.
I'm telling you, Obama's tax plan will not last 3 minutes in a Democrat congress. We're in trouble.