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Undoing the New Deal

$1,500,000,000,000 is a lot of money. Stuff still needs to get paid for, like excessively large military budgets complete with unnecessary new nuclear weapons.

So, of course they’re gunning for your 401k. If you want to retire someday, become an entrepreneur and make a couple billion dollars. Stop slacking all you whiners.

Here’s the plan:

At the moment, Americans under 50 can put up to $18,000 a year away tax-free in a 401(k), and people over 50 can put up to $24,000. The money can be invested in stocks, bonds or other funds. Over time, the money grows, creating a nice nest egg. People only have to pay taxes when they take the money out in retirement. Reducing the threshold to $2,400 is likely to dissuade some people from saving at all or saving more than that low amount, Rutledge says.

The main reason this idea is under consideration right now is not because Republicans are focused on improving retirement savings. Instead, they need money to pay for large tax cuts. The 401(k) tax break “costs” the government $71 billion a year in lost tax revenue, according to the Tax Policy Center, a think tank. Reducing the tax break is one way for the government to get more money, potentially over $700 billion in the next decade.

Another option is to “Rothify” retirement savings in America, meaning Congress would change the rules so any money that people put away for retirement above $2,400 would be taxed up front. This is how Roth IRAs (IRA stands for “individual retirement account”) work. People can only put after-tax dollars into Roth IRAs, though they don’t pay taxes on money they withdraw later in life, as they do with regular IRAs and 401(k)s. It’s a way for the government to get revenue sooner.

“I’m strongly against it as a budget gimmick,” says Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget, says of the 401(k) proposal. “It makes it look like we are raising revenue today when, in reality, we’re just shifting tax money from tomorrow to today.”

That’s right. It’s a tax increase for about $62 million of us.

I can just see the smug Trump voters who are shrugging and saying, “And that affects me… how, exactly??”

Also included are cuts to Medicare, raising the eligibility age.

Niiiiice!

All so some insanely wealthy people can keep more of their insane wealth. They’re just going to sit on that pile like greedy dragons if there are no incentives to invest it in American workers. Have you heard anything about that? No, you have not. And you want to know why? Because there is no such plan.

Party like it’s 1929!!

*****************************************

Well, it’s not like we didn’t try to warn people.

3 Responses

  1. 401ks were always a tool of the Repugnant devil. Except for some corporate bonds, most public bonds rendered less than the 15% tax taken. They already took a big chunk of folks retirement savings in 2008-9.

  2. “Here lies the United States of America, undone by its regrettably perpetually overabundant population of Stupid White Folks”

    Forgive me, Tom, but I find myself siding with Alex these days.

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