Obama Wants Your Retirement Account

Rush Limbaugh.com ^ | February 6, 2015 | Rush Limbaugh

[Kaslin]

RUSH: It's a story from the website Watchdog.org, and the headline: "Obama's Budget Targets Your Retirement Accounts." I can't recall the number of times that I have mentioned casually, forcefully, predicted directly over the course of the years that, as this government continued to expand and spend money it didn't have and print money it needed, that at some point it was gonna have to go get money.

You can't just rely on fake money that's printed. They're gonna have to get more. They're gonna target money, and I warned everybody, "They're gonna they're gonna come after your pensions, and they're gonna come after your retirement accounts, because that's real money there, and it's yours, and it's there." I knew this because the Reverend Jackson way back in the late eighties suggested that this was a great source of wealth for the government, because people that had huge retirement accounts really didn't need 'em.

They were already rich.

So it didn't take an act of brilliance to see this coming.

But it looks like it has arrived now. It's in the Obama budget. This is not the 529 scam that he's running, or wanted to run. It says here, "You should be concerned about President Obama's plans to raise taxes, even if you aren't one of his main targets for tax hikes. Your retirement could be at stake. Earlier this week the president finally revealed his budget proposal. He wants to increase spending, increase the deficit, and increase taxes, all while promising to simplify the tax code.

"'Simplify' is an odd way of putting it, considering that his proposals would actually make the tax code even more complex. Most Americans might not be too concerned about his plans to raises taxes on the wealthy and corporations, but they might be concerned about his proposals to change the tax treatment of retirement accounts. Politico made light of a provision known as 'The Mitt Romney Loophole,' but [Politico] failed to mention the other ways the president wants to change the tax treatment of retirement savings.

"Wealthy Americans will not be the only investors affected by these proposals. MarketWatch went through [Obama's] budget and found that there are more than a dozen provisions in the [Obama] budget that target retirement accounts. They aren't all bad, but the proposal to change the rules on Roth IRAs would hit middle class savers the hardest. Under the Obama plan employees would no longer be allowed to convert traditional retirement accounts to Roth IRAs.

"Further, [Obama] wants to impose required minimum distributions (RMD) on Roth IRAs, which, according to MarketWatch, is the most egregious proposal. Unlike traditional IRAs, contributions are made to Roth IRAs after taxes, but then they aren't taxed again on earnings that accumulate over the years. Currently people can withdraw as much or as little from these [Roth IRAs] as they like any time after the age of 59½."

So predictions notwithstanding, this is in Obama's budget. Look what wanted to do on the 529. These are your education savings accounts. He wanted to just take the money. He wanted to retroactively tax you on the money that you had been permitted to deposit into the 529 account tax-free. Whether this is gonna pass is another thing. I mean, it's Obama's budget, and the Republicans run the show.

But, folks, there are many people, an increasing number of people who don't simply rely on the fact it's a different party as evidence enough alone to stop Obama. Some of this stuff like Obamacare, we're learning, and executive amnesty on illegal immigration, the Republicans agree with the president on. But the bottom line is, he's out there talking about tax increases on "the rich," and not talking about tax cuts for you. Remember, now, you are supposed to be happy.

You're supposed to think you somehow are going to prosper, you are somehow gonna benefit when the rich pay some more taxes. Somehow that's called limiting the income gap or reducing the income gap. But I don't know how that works. I don't know how somebody I don't know paying more taxes is gonna make me have more disposable income. I don't follow the math on that. I don't see how that works. "Well, that's right, Mr. Limbaugh, but you're gonna be given more government programs."

What government programs? I don't have government programs now, but how does a government program put money in my back pocket? It doesn't. Besides, if it's a government program, I've gotta behave in a certain way in order to qualify for it, and my income has to be in a certain category before I qualify for it. There's no way. It's silly to think that tax increases on rich people somehow make the middle class more prosperous. But that's what Obama's selling.

Anyway, while saying all that, he's making a beeline for your retirement accounts, and he wants to tax the money that you have placed in those accounts tax-free. When it comes to the Roth IRAs, he wants to change the rules in the middle of the game and eliminate the flexibility you have in withdrawing money and depositing money all independent of taxes, as was the original promise.

[pgyanke]

Got that... but distributions from both are tax-free.

... currently.

[cynwoody]

A couple of years ago I retired and converted everything to cash. Not making anything on it but i don’t trust any of them.

See Is It Time To Move Wealth Outside Of The Financial System?

The author takes a stab at calculating the nominal interest rate on physical cash and comes up with -0.22%:

Assuming an investor exhausts the $250,000 FDIC insurance deposit limit (or mistrusts the FDIC's ability to pay), one alternative worth considering is a safe deposit box. A box large enough to hold $1 million in $100 bills can be rented for about $200/yr. While banks themselves will not insure the contents of a safe deposit box, insurance on a box's contents can be purchased for up to $1 million in valuables. This $1 million in insurance can be purchased for as little as $2,000/yr. Hence, having a fully insured $1 million in a safety deposit box costs about $2,200, the equivalent of an interest rate of -0.22%.

Of course, his title is a trifle misleading. Converting $1m to physical cash does not move it "outside of the financial system". This is because it is paper wealth, the value of which the financial system determines. His real rate of return will be less than -0.22%, because the government can be relied upon to spawn inflation, stepping on those Franklins.

[Jim Noble]

I had a great 401(k), but I took it with me on a fishing trip, and you’ll never guess what happened...

[Jim Noble]

“dumbfounded at how this helps the government raise money.”

He doesn’t care if it raises a nickel. That’s not why he’s doing it.

[Jim Noble]

“because the current economy would crash beyond repair.”

That’s already a done deal. Although credit is a fine medium of exchange, it’s not money because it’s not a store of value - as the upcoming catastrophe is about to demonstrate.

The banksters are buying ranches with airstrips in New Zealand. What does that tell you?

[Inyo-Mono]

Bttt.

[sheana]

Yeah yeah. I worked in the financial system everyday. You think I don’t know about money?