Ed Morrissey at Hot Air has a post up discussing how House Democrats want to kill your 401(k).
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...
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.
Says Ed:
That means your employer can no longer write off their contributions to your 401(k), and your capital gains would be taxable year-on-year. In other words, it becomes just another investment or savings account, with no tax benefit at all, and no employer contribution. Instead, Uncle Sam would give you your “matching” funds — up to a whopping $600 per year! Whoopee!
As Michelle Obama says, you could buy a pair of earrings every year … except, of course, you can’t. It’s in The Lockbox, defined by politicians as Locked Away from You but Accessible to Us. It goes there along with 5% of your gross earnings, apparently to play with the 7% of your gross earnings that already goes to Social Security. And what do they do with the money? They give you government bonds as your only investment option.
Why would Democrats want to gut the best retirement savings vehicle Americans have? Two reasons: (a) more government control for them and (b) more money for them to spend on things we don't need.
Remember the "Social Security lockbox"? The one that doesn't exist because we use the money to hide the size of the deficit? Now imagine that there are two lockboxes...both available for government pilfering and both without you being able to control your money. For 600 bucks.
Wow, Democrats controlling government is such a great idea!
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