Eliminating 401K’s will crush, I mean CRUSH, the market. We’ll be partying like it’s 1929. I’m hoping Volker is able to head this one off at the pass.
I don’t think the article mentions eliminating 401IKs. Honestly, I don’t think they’re that stupid. Keeping Wall Street happy has become the #1 priority of both parties. It is too big a reservoir of contributions and cronies for it to be otherwise.
Won't help the savings rate much either, but that's not what's being proposed here, in fact most of them make a great deal of sense. This is small time tinkering with the system, but it's a shame GWB didn't find the time to do similar tinkering.
-temporarily waive the penalties and taxes on withdrawals made after age 70 1/2.
Should be permanent, the government collects taxes eventually, there’s no interest in forcing distributions at an arbitrary age.
-allow workers to make hardship withdrawals of up to 15 percent of their balance from individual retirement accounts or 401(k) plans this year and in 2009.
Makes sense, though I see no reason for the 15% limit. Only politicians can predict the future with precision, imo there should be no penalty on premature withdrawls at all. A time frame for the funds to have been in, 5 years like a Roth for example, would be reasonable to establish the intent of long term savings.
-Eliminating income taxes for seniors making less than $50,000 a year.
Would be nice to eliminate income tax for everyone, but till we do, a senior making $50,000 should pay the same as a junior making $50,000.
-Matching 50 percent of the first $1,000 of savings for families that earn less than $75,000 a year.
I can’t think of any reason to do something like that, other than backdoor income redistribution.
-Regulating pensions more strictly by ensuring that bankruptcy courts cannot use pension funds to pay creditors ahead of some other company assets, prohibiting companies from giving executive bonuses while cutting worker pensions, and limiting the circumstances under which retiree benefits can be reduced.
A technical issue which makes sense. Actually, we need to revamp the bankruptcy laws to deal with “too big to fail” companies. Which aren’t the taxpayers responsibility. We could have called it Chapter GWB, but if it’s Chapter BHO, that’s OK too. File this under government actions designed to save taxper money, aka The Trash.