A 'Spread the Wealth' Plan for your 401k?Americans are finally starting to hear about B.O.man's socialist agenda. His income tax policy of taking money from one group and giving it to another group who doesn't pay income tax is simply a welfare program. With Democrats in charge of the U.S. House, Senate, and the White House, that's exactly the kind of big-government program we would get. And it doesn't stop there.
Democrats are now looking at a plan to go after Americans' 401k accounts. These accounts serve as the retirement nest-egg for millions of Americans. They are used because money can be saved in these accounts tax-free. Oh, that is unless that new Democrat plan of "spread the wealth" becomes law. Then, we could all see our 401k tax breaks go out the window...
According to a report in U.S. News, Democrats are considering a plan that essentially end 401k plans in favor of a government-run saving plan. As the other notes:
I hate to use the "S" word, but the American government would never do something as, well, socialist as seize private pension funds, right? This is exactly what cash-strapped Argentina just did in the name of protecting workers' retirement accounts. Now, even Uncle Sam isn't that stupid, but some Democrats might try something almost as loopy: kill 401(k) plans.
House Democrats, looking for a way to have government take over more aspects of our lives, recently heard testimony on a plan promoted by Teresa Ghilarducci, a professor at the New School of Social Research in New York, "on her idea to eliminate the preferential tax treatment of the popular retirement plans."
In place of 401(k) plans, she would have workers transfer their dough into government-created "guaranteed retirement accounts" for every worker. The government would deposit $600 (inflation indexed) every year into the GRAs. Each worker would also have to save 5 percent of pay into the accounts, to which the government would pay a measly 3 percent return.
The topic is also covered in an article in Workforce Management. The Democrats' plan would target "the $80 billion in annual tax breaks that 401(k) investors receive." In essence, the 401k would lose the benefits that make it popular including the "employer-matching" feature upon which so many average Americans rely.
“From where I sit that’s just crazy,” said John Belluardo, president of Stewardship Financial Services Inc. in Tarrytown, New York. “A lot of people contribute to their 401(k)s because of the match of the employer,” he said. Belluardo’s firm does not manage assets directly.
Higher-income employers provide matching funds to employee plans so that they can qualify for tax benefits for their own defined-contribution plans, he said.
“If the tax deferral goes away, the employers have no reason to do the matches, which primarily help people in the lower income brackets,” Belluardo said.
The article quotes Christopher Van Slyke, a partner in the La Jolla, California, advisory firm Trovena. Van Slyke makes a key observation which I will repeat here: "This is a battle between liberalism and conservatism. People are afraid because their accounts are seeing some volatility, so:Democrats will seize on the opportunity to attack a program where investors control their own destiny."
Let's think about that quote for a second and let it sink in. Van Slyke is absolutely right, and it's how the left-wing Democrats and Barack Obama are trying to move more and more power away from the people and put it in the hands of the government. Even some Republicans are joining in. The $700 billion bail out is simply more big government, and yet you had Republicans jumping on board all in the name of "crisis" prevention. So-called conservative commentators like Fred Barnes need to take a hike and let conservative ideals work. While he enjoys his inside-the-beltway philosophical life style, average Americans around the country are suffering because government is taking more and more of their freedoms.... but I digress... back to the 401k scheme...
Barack Obama sees the current state of the economy, and he says, "Vote for me. I'll take money from the 'rich' and give it to YOU!" That rhetoric is shameful, and it is a step in the socialist direction. The Democrats see the current problems in the stock market, and are now using it to propose a government take-over of retirement accounts.
The key to see is the part where the government would put $600 each year into an account for every single worker. Where would that money come from? That money will have to come from somewhere, and that somewhere is from other Americans. More "spread the wealth" is not what America needs. The Democrats should be ashamed of using crisis to promote more socialism, and the Republicans are stupid for not pointing it out.
Come on! Show our conservative ideals for what they are, and expose Obama and the Democrats for what they are. Is it really so hard? This nation was founded on the basis of freedom, invention, and the entrepreneurial spirit. In these tough economic times, we need more freedom, not less. Come on, McCain... take that message to the American people. The government has no place raising taxes on any one. It should not take over people's retirement accounts. In tough economic conditions, we need an America that believes in the power of the American worker, not the power of the government.