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megimoo
10-24-2008, 06:20 PM
House Democrats Contemplate Abolishing 401(k) Tax Breaks

Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.
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House Democrats Contemplate Abolishing 401(k) Tax Breaks
Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.

House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.

A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. She testified last week before Miller’s Education and Labor Committee on her proposal.

At that hearing, the director of the Congressional Budget Office, Peter Orszag, testified that some $2 trillion in retirement savings has been lost over the past 15 months.

Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.

The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.

“I want to stop the federal subsidy of 401(k)s,” Ghilarducci said in an interview. “401(k)s can continue to exist, but they won’t have the benefit of the subsidy of the tax break.”

http://www.workforce.com/section/00/article/25/83/58.php

AlmostThere
10-29-2008, 04:02 AM
This can't be true. Lord Obama proclaimed that no one earning less than 250K or was it 200K or maybe 150K, would have their taxes increased. There must be at least 1 or 2 people earning less than 250K or was it 200K or maybe 150K that contribute to a 401 plan. I'm still a bit confused how his Lordship says no one earning under 250K or was it 200K or maybe 150K will have a tax increase when he says capital gains will be raised to 20% or maybe 25% or maybe 30%, (it depends on who he was talking to at the time, ya know). Aren't there at least a couple people in this country earning less than (you know) who also own stock and who pay capital gains tax? :confused::confused:

In the famous words of Vinnie Babarino, "I'm so confused!!!".

Lager
10-29-2008, 10:19 AM
Wow!, if they're floating this kind of stupidity before he even wins, what are they going to do with control of the whole government? This is nuts. 401K's are working fine, Social Security is questionable. 2 trillion has not been lost. Just look at the market yesterday. It's only a paper loss. The grab for control of your money has started in earnest, before the election is even over. Beware.