Simple question: 401(k) seizure.....isn't this an ex post facto law?

Me ^ | 11/7/2008 | Me

[Red in Blue PA]

And if not, why not?

You cannot have a law which says that people adding to their accounts have money which is theirs and THEN pass a law which confiscates this money.

From everything I learned in school that would qualify as an ex post facto law. Where am I going wrong?

[PugetSoundSoldier]

Seems Bill Clinton handily proved that false back in 1993!

[muawiyah]

"Money", under current law, is a monopoly of the federal government. What they intend to do is "take your old money" and "give you the new money". That is, force a swap of taxfree dollar denominated deposits for taxable dollar denominated bonds.

I'm sure this is all Constitutional and no one will mind at all (/sarc).

(I'm buying an even bigger gun ~ at the moment looking at a working Howitzer ~but must be careful how I handle the deal eh ~ can't park it in the garage!

(Bwahahahahahahahaha!!!!!!)

[Roccus]

Finally, someone on this thread who actually understands how this will be imposed.

[Red in Blue PA]

A large "exception" to the ex post facto prohibition can be found in administrative law, as federal agencies may apply their rules retroactively if Congress has authorized them to do so. Retroactive application is disfavored by the courts for a number of reasons http://en.wikipedia.org/wiki/Ex_post_facto_law

[ROLF of the HILL COUNTRY]

“The money in your 401k is not technically yours.”

That's a big Bravo Sierra!

The money that is taken from your paycheck is YOURS along with any interest/capital gains on it!!!!

[IGOTMINE]

Bill of attainder.

[Strutt9]

"Where am I going wrong?"

Comies in all three houses. They will do it.. and Pravda will help them.

[o_zarkman44]

The sucking sound you hear from the stock market is the people closing out their 401k’s (whats left of them) and taking a 15% tax instead of who knows what.

this is just a tip of the iceberg what the marxists plan on grabbing.

[murron]

FDR didn’t succeed in increasing the size of the SCOTUS. He tried, but failed.

[mek1959]

Gosh you're right...sadly.

People have got to wake up and understand once for all that liberals/socialists/Marxists don't play on the same field we do. They are not a respecter of the “rule of law”. They are not shamed nor are they ashamed of their positions. They don't care whom it hurts. They casually lie and have no sense of guilt when caught or confronted. Look how Obama handled the broken promise of public financing. Did he accept responsibility? Did he acknowledge wrongdoing? Did he even acknowledge McCain's confrontation? Nope, he flat out lied, broke a promise and what did he do? He obfuscated and ignored. This is what liberals do, their conscience is not troubled by this.

This is why we lose so often in the Senate and the House. Whenever you here one of our guys start off a comment with I simply disagree with “my good friend from so and so”, hide your wallets or prepare to give up a freedom. Our guys really believe that their “good friend from so and so” is their good friend. How naive.

We're in a war folks...with two sides. One side is the enemy of our beliefs. Listen to Reagan's 1964 Convention speech and you'll understand better...he did.

[Tuscaloosa Goldfinch]

So what is the tax bite for cashing in your 401K? My son says it will wash out to be 40%, I thought it was more like 15.

[trad_anglican]

The money that is taken from your paycheck is YOURS along with any interest/capital gains on it!!!!

That's not correct. You agreed to defer receipt of some of your compensation. If it was yours, you would have been taxed on it. You have a nonforfeitable right to the money at some time in the future, but today it's not your money.

[allmost]

It’s taxed at the point of use like everything else. I do believe that ERISA allows amending the tax code. They change the tax implications of retirement plans on a fairly regular basis. Almost every year something changes.

[DManA]

You are wrong in assuming marxists care about fine points of the law.

[Red in Blue PA]

But it sounds like the new law be discussed would go against the original law’s intent.

I cannot see how that would be legal or Constitutional.

[Ceebass]

All they have to do is repeal the law which created 401ks.

they can pass a law repealing the social security act if they want to.

[mgc1122]

“History’s not a strong suit eh, mgc .. FDR tried .. but failed.”

Think Obama will fail with a solid rat Congress? Try to think a bit out of the box, ok?

[Soliton]

You are not very good at googling. Congress has passed retroactive financial legislation dozens, if not hundreds of times. Ex post facto refers to being charged with a crime that became a crime after the act was committed.

[OneWingedShark]

>All they have to do is repeal the law which created 401ks.
>
>they can pass a law repealing the social security act if they want to.

I know it would make me unpopular, but I’d do it; Government has shown, time and again, that it is not secure, but rather a slush-fund.

[javachip]

It depends on several factors. The most significant is your marginal tax rate since the 401k withdrawal is treated as income. In addition, most would be hit with a 10% early withdrawal penalty.

So, if you’re currently in the 25% marginal tax bracket, 35% of a 401k withdrawal would go to the tax goons. Unless you are in a situation that’s exempt from the the 10% penalty, then it would be 25%.

If it was a sizeable withdrawal or you’re close to the break point for the next tax bracket, you could end up paying a more since the withdrawal might push you into the next bracket.

Waiting patiently for smarter Freepers to tell me what I got wrong. :)