Democrats to Consider Nationalizing Personal 401k Plans
You may not care about William Ayers, Jeremiah Wright, and Tony Rezko. You may not care about Obama palling around with terrorists and calling a racist, hate filled, American hating reverend his spiritual adviser. You may not care about Obama not wearing a flag lapel pin (and by the way, when did McCain stop wearing his? He didn’t wear one during any of the debates, while Obama did.) You may not care that Obama is a socialist and you may not care that the economy has been socialized and you may also not care that the government has no business socializing health care.
But you damn well should care about this. Congress is considering taking the money away from you that you put in your 401k plan voluntarily and nationalizing it.
The market turmoil has some politicians on Capitol Hill eyeing the end of the 401(k) as we know it
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.
You would be required to contribute 5% of your pay and it would go to the Social Security Administration. This account would gain 3% interest as opposed to the gains that you would receive when the market turns around. This would replace your 401k account. In other words the government is going to take away the money that you voluntarily decided to invest in the stock market for your retirement.
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.”
This amount to a tax increase on everyone who has a 401k plan. Most Americans would lose this tax break. Losing a tax break is the same as a tax increase. It is a semantics game Democrats are playing.
her plan would amount to a tax increase on workers making more than $75,000–considerably less than the $250,000 Barack Obama has said would be his tax-hike cutoff.
And it gets even better.
workers would be able to pass on only half of their account balances to their heirs; presumably the government would seize the remaining half.
If you die, the government will keep half of the money that you voluntarily decided to put towards your retirement. Your family will only get half.
You wanted change, you are going to get it.