Posted on 10/09/2008 11:25:48 PM PDT by Fred
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.
That simply results in transferring money from taxed savings accounts to untaxed accounts, she said.
“If we implement automatic [individual retirement accounts] or if we expand the 401(k) system, all we’re doing is adding to this inefficiency,” Ms. Ghilarducci said.
Rep. Robert Andrews, D-N.J., raised the issue of which investment advisers are allowed to offer workers investment advice.
The Department of Labor is considering “loopholes” that would allow advisers to offer “conflicted investment advice if the advisers work for subsidiaries of financial services companies that sell the investments,” he said.
With American workers facing $2 trillion in losses from retirement plans over the past year and Democrats expected to gain seats in the House and the Senate, actions being contemplated by the committee are an important harbinger of what could come out of Congress next year.
I feel like I’ve entered the Bizarro World. So many avenues of attack against Obama and yet none of them seem to gain traction.
Marxism plain and simple
I honeslty don’t know at this point where McCain’s position would be on this. No Clue.
Social Security votes Vs. 401k votes.
A portion of the American voting public are about to admit to us through their votes that, after years of liberal-controlled schooling, they don't give a crap about all that "justice" and "what this country was founded for" junk and just want the government to redistribute wealth.
I usually brush a lot of this stuff off, but this time it's scary.
It would make more sense to take away the tax break going into the 401ks. They can’t seize the money that is already there and exchange it for gov’t bonds. They just can’t do that. It’s not their money and it would be very difficult to tax it at the rate that it would have been going into the 401 k. My husband has been paying into his for as long as they have been in existence and before that, it was an ESOP plan, which was after taxes. How are they going to tell the difference?
So, effectively, they want to move everyone to compulsorily fund government by buying the bonds and ensure noone gets a fair market return, but a pittance of 3-4% barely breaking inflation ?
If they do this I’m moving whatever little I have offshore. At that point it’ll be cost effective.
“We’ve invested $80 billion into subsidizing this activity,” he said, referring to tax breaks allowed for 401(k) contributions and savings.”
You see, when you get a “tax break” then that was really money that belonged to Congress and Congress should have gotten that money for its wealth and income redistribution schemes. So, all you 401K cheaters of Congress rightful revenue, you WILL give it back!!! /sarc
I think I heard that Rangel had gotten a bill through saying that you can’t take your money offshore - you have to leave 50 per cent of it behind.
Frickin Marxist Democrats are sending this country down the tubes.
It is madness.
Whatever. I’ll stick it my underwear if I have to.
Tho that is not true. I can wire however much I wanna wire anywhere I want to.
And they’ll tax that too.
Fascists is the word you were looking for.
“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.”
Hahahhahaa...these people are insane! Yeah, just what I want to do, trade my investments for the toxic US junk they just bought up from wall street. I so trust US gov’t bonds now...unbelievable the depths these criminals will go to to steal from us now. If the rats win and they come after all we have left, sounds like we need another Boston Tea Party to get things rolling.
At the moment, it sure looks like you’re right.
I have long held what my grandfather taught me, ‘Bravery is the ability to control ones fears.’ Gramps was right, but it is becoming much more difficult to keep those fears in check.
Perhaps it’s because most everything is failing, we are all being attacked on so many fronts and the enemy is from within. With our leadership so corrupted and protected, it’s going to be tough times for a long time, I’m afraid.
As with anything, there is a breaking point. I wonder if those that are tearing our country apart have considered that when justice comes for them, it will give no quarter.
Do I really want to look up this school? I can almost tell from the name that they probably invest more in 5-year plans than stocks.
Not if they don’t know about it. See my previous ‘underwear’ post.
In other news, turns out all the banks have been using the South Park business principles :
1. Collect Underpants
2. ?
3. Profit
So anyone contributing to a 401K is one of the "highest-income earners"?
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