Greebo Posted October 16, 2008 Report Share Posted October 16, 2008 http://investmentnews.com/apps/pbcs.dll/ar...2/REG/310139971 http://genxfinance.com/2008/10/16/did-you-...your-401k-plan/ Partial excerpt from first article: House Democrats contemplate abolishing 401(k) tax breaks Mandatory contributions from workers considered By Sara Hansard October 12, 2008, 6:01 AM EST Post a Comment Recommend (34) 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-Calif., and Rep. Jim McDermott, D-Wash., 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. A plan by Teresa Ghilarducci, professor of economic-policy analysis at The New School for Social Research in New York, contains elements that are being considered. She testified last week before Mr. Miller's Education and Labor Committee on her proposal. Getty Images George Miller: Looking at redirecting tax breaks to a new system of guaranteed retirement accounts. At that hearing, the director of the Congressional Budget Office, Peter Orszag, testified that some $2 trillion in retirement savings has been lost over the past 15 months. Under Ms. Ghilarducci's plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5% 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% 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," Ms. 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, Ms. Ghilarducci said. "I want to spend our nation's dollar for retirement security better. Everybody would now be covered" if the plan were adopted, Ms. Ghilarducci said. She has been in contact with Mr. Miller and Mr. McDermott about her plan, and they are interested in pursuing it, she said. "This [plan] certainly is intriguing," said Mike DeCesare, press secretary for Mr. McDermott. "That is part of the discussion," he said. He thinks that not paying taxes now (but having to pay them later) constitutes a subsidy, so he wants to take taht way and replace it with a different subsidy coupled with mandatory purchase of gov't savings bonds... Welcome to the U.S.S.A. Quote Link to comment Share on other sites More sharing options...
Jake_Ellison Posted October 16, 2008 Report Share Posted October 16, 2008 (edited) "I want to stop the federal subsidy of 401(k)s," Ms. 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." Benefitting from "the subsidy of the tax break" makes them buy blue oranges that taste like aeroplane blue yellow cloudy fish, furthermore fuck the rich. I'm running for conress, so vote for change you can believe in. Did I say fuck the rich because the subsidy gready capitalist tax break financial abolish poverty colonialism thing? What the hell is a "subsidy of the tax break", professor (of economic-policy analysis at The New School for Social Research in New York) Theresa Ghilarducci? Edited October 16, 2008 by Jake_Ellison Quote Link to comment Share on other sites More sharing options...
khaight Posted October 16, 2008 Report Share Posted October 16, 2008 Wonderful. Let me beat something into your head with a hammer, you bitch: Letting me keep my own money is not a fucking subsidy! And if the hammer doesn't work, I have a prybar I can and would cheerfully use for additional emphasis. I'll be in the parking lot at lunchtime. Quote Link to comment Share on other sites More sharing options...
brian0918 Posted October 16, 2008 Report Share Posted October 16, 2008 Benefitting from "the subsidy of the tax break" makes them buy blue oranges that taste like aeroplane blue yellow cloudy fish, furthermore fuck the rich. I'm running for conress, so vote for change you can believe in. Did I say fuck the rich because the subsidy gready capitalist tax break financial abolish poverty colonialism thing? What the hell is a "subsidy of the tax break", professor (of economic-policy analysis at The New School for Social Research in New York) Theresa Ghilarducci? Are you forgetting the inalienable right to be taxed? Quote Link to comment Share on other sites More sharing options...
D'kian Posted October 16, 2008 Report Share Posted October 16, 2008 Regardless of other considerations, won't this move discourage savings and encourage debt? Just what we need right now. Quote Link to comment Share on other sites More sharing options...
Greebo Posted October 16, 2008 Author Report Share Posted October 16, 2008 Regardless of other considerations, won't this move discourage savings and encourage debt? Just what we need right now. Oh, no, because they'll *MAKE* us save for our future! Quote Link to comment Share on other sites More sharing options...
gags Posted October 16, 2008 Report Share Posted October 16, 2008 If there were ever a more convincing piece of evidence that what these people are really about is control, then I don't know what it could be. They won't be satisfied until every man woman and child in this country is a dependent of Uncle Sam. Quote Link to comment Share on other sites More sharing options...
khaight Posted October 16, 2008 Report Share Posted October 16, 2008 Oh, no, because they'll *MAKE* us save for our future! No, they won't. They'll make us buy government bonds and call it saving. Of course, the alleged return on those bonds must itself be paid from future tax revenue. This is the same underlying game as the "lockbox" our Social Security taxes allegedly go into. True savings pay a rate of return because the entity holding the savings uses them to produce additional wealth that would not have otherwise existed, and pays you a cut. Government doesn't produce additional wealth; the return you get on its bonds comes from tax revenue. "Savings" in government bonds are fundamentally different from savings invested in the private sector. The latter is a claim to future production; the former is a claim to future theft. Quote Link to comment Share on other sites More sharing options...
D'kian Posted October 16, 2008 Report Share Posted October 16, 2008 (edited) Oh, no, because they'll *MAKE* us save for our future! What are you? Some kind of right-wing religious, free market radical nut? They'll bail us out. Edited October 16, 2008 by D'kian Quote Link to comment Share on other sites More sharing options...
Greebo Posted October 17, 2008 Author Report Share Posted October 17, 2008 What are you? Some kind of right-wing religious, free market radical nut? They'll bail us out. How could I ever doubt them. I should throw myself on my sword while begging forgiveness, of course. Quote Link to comment Share on other sites More sharing options...
D'kian Posted October 17, 2008 Report Share Posted October 17, 2008 How could I ever doubt them. I should throw myself on my sword while begging forgiveness, of course. You should be so lucky. Your ability is great and you haven't delivered what you're able to. Their needs are greater. Quote Link to comment Share on other sites More sharing options...
K-Mac Posted October 17, 2008 Report Share Posted October 17, 2008 I'll be in the parking lot at lunchtime. Love it! Regardless of other considerations, won't this move discourage savings and encourage debt? Just what we need right now. It seems like it would also encourage a rush on the market. As soon as that passed, all these people who put money into their retirement plans instead of liquid savings accounts (i.e. didn't save for a rainy day), will rush to sell mutual funds and receive distributions. Quote Link to comment Share on other sites More sharing options...
prosperity Posted October 27, 2008 Report Share Posted October 27, 2008 http://investmentnews.com/apps/pbcs.dll/ar...2/REG/310139971 http://genxfinance.com/2008/10/16/did-you-...your-401k-plan/ Partial excerpt from first article: He thinks that not paying taxes now (but having to pay them later) constitutes a subsidy, so he wants to take taht way and replace it with a different subsidy coupled with mandatory purchase of gov't savings bonds... Welcome to the U.S.S.A. As is, I can count on 1 finger the times where a 401(k) makes sense to invest in for the long-term. The problem is that you can't invest in them for the short-term effectively either. If you take away the tax break on the front end, it becomes a total piece of crap. I know this shouldn't come as a surprise to those on this board, but treat Government sponsored anything with an extremely high dose of skepticism as to whether it will do what it is allegedly supposed to do. Quote Link to comment Share on other sites More sharing options...
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