Skip to comments.Feds eye retirement-fund tax to cut $16 trillion-plus deficit (Obama's war on savers)
Posted on 04/22/2012 4:44:53 AM PDT by jimbo123
Uncle Sam, in a desperate attempt to fix its $16 trillion-plus deficit, is leering over Americans retirement nest egg as its new bailout fund.
Capitol Hill politicians are assessing tax changes that could let the Internal Revenue Service lay claim to a portion of the $18 trillion sitting in 401(k) accounts and other tax breaks used by middle-class workers, including cutting the mortgage tax deduction.
(Excerpt) Read more at nypost.com ...
You’re right. Your tag line is perfect
You’re right. Your tag line is perfect
When people save, it makes money available for investment in future production. Unfortunately, our federal government has made it non-viable to invest in manufacturing in the US.
Check out the “middle class task force”. In order to “help” middle class Americans retire on more than SS, they want to have them purchase lifetime annuities that kick in at 80. Funded with 401(k) $. Of course, it would have “lower costs” if the Government handled these accounts. And there would have to be new taxes to fund accounts for those without 401(k) plans to make it “fair”. Starting this stuff right now, the preliminary changes are effective July 1.... This summer.
I no longer am involved with I.R.A.s and 401Ks but my wife is and will be 59 1/2 on June 27th, this year. We are considering removing all of it and taking the tax hit (but no penalty) at that time. The “Bush tax cuts” expire at the end of this year and that’s going to be devastating to us so called “rich people”.
“Rich” is defined by liberals as anyone who has a paying job or one who has worked all his/her working life to accumulate money to take them through their old age. To them, it’s only fair to take some of our “vast wealth” and give it to the have nots who have worked not, in their entire lives and in some cases it goes all the way back for several generations.
Babies born in the Lyndon Johnson era, now pushing 50 years old have been on welfare their entire lives and some have children, grand children and even great grand children who are in the same situation. Never worked a day in their lives but now they “deserve” some of mine and my wife’s hard earned and saved money. Screw them, let them starve if they won’t work.
Yeah that should work.
Remove incentives to work and save.
Anybody familiar with the concept of a death spiral?
Or a negative re-enforcing system collapsing?
The single largest block of money on the planet is the $18 trillion sitting in the 401(k) accounts of WORKING Americans. Of course Uncle Sam wants their filthy little mitts on this cash.
As an employee benefits lawyer I can tell you without a single doubt, this is a horrible idea on so many levels.
From an Obama/liberal perspective it’s a win/win - grab an extra $450 billion a year from working Americans and destroy their retirement forcing them to rely on Mother Government for subsistence as they age.
Moneywise, it already does. Render unto Caesar what is Caesar’s.
I haven't had a mortgage in several years but due to out of pocket medical expenses - $16,000 in 2010, $14,000 in 2011, plus my church giving makes it better for me to itemize.
—When people save, it makes money available for investment in future production.—
Yes. But until then it doesn’t exist. And if the government monetizes the debt, and this causes people to spend those “saved” dollars while they still have value, it can cause out of control hyperinflation.
I intentionally left out church giving. ;-)
And to be frank, liberals tend to not do it.
My guess would have been this summer, but then read post #54
The legislative pieces such as NDAA (and others, such as drones which are over universities across Amerika) are in place the executive orders already written are telling of what’s to come. No one has stopped this administration yet.
The article below was posted last night and worth a read.
U.S. Building a Domestic Population-Control Grid Based on Military Ops
“It has already started. The Department of Labor is extending their powers under ERISA laws in ways that were never intended. Congress could stop them but since the Dems still control the house nothing is happening.”
JD, there is little the House can do. Phyllis Borzi and her minions at the Employee Benefits Security Administration are running wild through the regulations process to long existing statutes with very aggressive re-interpretations of how they apply. Borzi’s shock-troops are also tearing through the federal court systems with amicus briefs telling the bench how to apply the law in many cases. It empowers the liberal judges and the conservative judges are rejecting the march to expanded power.
The Republicans are just as corrupt as the Dems. They are now co-conspirators in almost every progressive attempt to take our money and our freedom. Sad but true.
They think they own the principle because it was never taxed.
A couple of suck wads.
Why don’t they just come out and admit they want ALL the Money and No One Else can have any? Why don’t they admit they want to enslave the western world into the communist-like islamic caliphate that they dream about being some of the Top *officials of. They get it ALL and the rest are slaves.
(Note: I couldn’t think of anything more insulting then the word officials as I didn’t want to insult dogs, clowns, sloths or slobs.)
Clearly you have never studied economics.
Thank you for the links, I’ll go check them out.
No advantage? Energy independence is vital for any nations security. Additionally, oil exports produce foreign revenue.
Is pollution from oil a problem in the US? Why would it have to be in Argentina?
I live on the Gulf and can’t play stupid with you anymore about the cost to human and animal life that comes with hosting oil exploration. Thanks, BP. It is a steep cost with little payoff to the locals who host the drilling and refining of oil (air pollution). There is no price you can set on the death and destruction that occured to the gulf states industries, people and wildlife as a result of BP’s carelessness. It was criminal. They try to pretend they have cleaned it all up and everything is fine and dandy, but it is not.
So the price of hosting oil exploration is extremely steep for the hosting Nation and people and the payoff in Argentina’s case, is nil. That is why they are nationalizing the Nation’s oil business. They want to get some profits for their trouble. They don’t even get to use the oil. They are dependent on oil imports because of global markets and the only interests considered - the oil corporation’s interests and the interests of foreign nations and economies.
I am no green nut but try to get off the grid. Also many places if you live in a trailer on wheels they cannot tax the property as "improved".
In a fiat money system, money that is in a mattress does not exist.
Most of our savings is in Roth Iras too, but there is no telling with this regime. 0 bummer wants wealth redistribution to hurt the workers who are getting ready or just retired like me. Remember, he said he is not worried about the working white people for his reelection.
Personally I would like them to drastically cut social programs.
The percent of the money supply in cash is miniscule. Do some research. Even if ALL the cash was hoarded it is so small an amount as to be a non factor. In defense of you r position: The only way your scenario would be viable is if/when their was a run on the banks and the fed had to actually crank up their printing presses. Rumor has it the Fed has printed the money for a run already. I think the Feds want a run but that is my paranoia coming out. It could happen, but it isn’t right now, so you scenario is moot.
Flash stock market crash and bank run. After the market crashes, the funds will only be worth half their previous value if that. This is like the government confiscating people’s homes and then being surprised when they’ve been destroyed or burned down before actually taking possession.
I agree that it is moot right now. That said, our economy depends on consumption. When people stop consuming - in large numbers - and save money “in mattresses” (and interest rates are so low, it’s a good way to do it) it will no longer be moot.
It was said a couple of decades ago that because micro-brews, by design, could only make fairly small quantities, they would never be a threat to Budweiser. But they are now legion. Bud is dying of a thousand cuts.
If you get my drift.
Hahahahaha Hahahahahah Hahahahahah Yeah I get it...
The Republicans are Part of Congress and Congress Critters buy votes with other people's money. Remember that.
I can't wait for Boehner's Speech.
I can hear him now:
"Read my lips... No new Taxes!!!"
and it is all being done in the name of “fairness” and Social Justice...”
I am 59.5 on Jan 11th 2013, I am SOL.
I meant to write “Dems control the Senate”. Congress COULD reign in this expansion of power, but with a split house ans senate it’s not happening. This stuff is very scary and few are paying attention. Just wait until a bunch of 401(k) plans are found to be “non-compliant”.
“Just wait until a bunch of 401(k) plans are found to be non-compliant.”
They are - everyday. The EBSA auditors will cite plans for being in violation of various provisions of ERISA. If they can cite for a prohibited transaction - usually a Mickey Mouse error - they impose ERISA section 502(l) penalties which are 20% of the amount involved and automatically go up to 100% of the amount involved if not paid within 100 days.
“I no longer am involved with I.R.A.s and 401Ks but my wife is and will be 59 1/2 on June 27th, this year. We are considering removing all of it and taking the tax hit (but no penalty) at that time. The Bush tax cuts expire at the end of this year and thats going to be devastating to us so called rich people............”
Think about that clearly before you do that. That would just be playing into their hands giving them immediate taxes. If you end up deciding to do pull your money from your IRAs & 401Ks and pay the taxes now, you might be better off long-term by transferring those funds to a ROTH IRA (at least FUTURE withdrawals from the Roth would be tax free). But, again, that is something you should study thoroughly before doing.
The American people have no one to blame but themselves. Especially the 50+ year olds. Our deficits were growing and no one wanted their entitlements gored. The Black Swan event that destroyed the US was 9/11 which set into motion the bankrupt wars that followed and the Fed Reserve tradition of bailing out Wall Street every time one of their schemes imploded. 2008 was the mother of all implosions with a huge derivative minefield still ready to explode if EU falls apart. Bankers basically told the Fed Gov that due to their failure to monitor Wall Street activity, larger and larger schemes were sold to the US and world system that if the US gov does not spend trillions in bailout and assume the toxic assets, the US financial system/economy will implode. Instead of taking the medicine of one severe reset and depression, the Fed Reserve and gov chose to bailout and QE till our debt is a threat to US power and survival. Congress has no choice but scavenge America for savings and assets to tax to close this desperate deficit or the US face collapse. The only way out for the US is taxes, austerity and inflating our debt away. If the middle class does not make proper preparations they will see any savings taxed and inflated by higher prices.
Study Brazil. After WW2 she had a growing middle class until she over borrowed in the 1960’s. It was thru taxes and money printing (inflation) that allowed her to eliminate her international debts. Today relatively debt free and resources rich Brazil is emerging again. The price of her ordeal, the absolute destruction of her middle class. The US middle class is facing the same fate.
I have taught my children to follow my example and stay away from government “sponsored” retirements such as IRA’s and 401K plans. Just invest the money (after taxes) themselves...you cannot trust the government to not steal this money down the road, they have no morals and no ethics. Stay independent! That means (for you anti-Romney “conservatives”) stay away from the government as much as you possibly can.
Didn’t the Argentine government confiscate many pension plans when they got into serious economic trouble?
Pass a constitutional Amendment that requires all Government agencies to rejustfy their existence every 15 years. If any agency fails to met its established, by law, goals in 15 years they are automatically closed., their real property is sold, and all employees forced to find new jobs.
The problem that has finally hit us squarely between the eyes isn't the lack of taxes it is overspending at multiple levels by the Federal Government.
Lets start with my two “favorite” agencies - the Department of Energy and the Department of Education.
Department of Energy was established in the late 1970s and was supposed to reduce our dependency on foreign oil. Forty years later what have they accomplished other than increasing the amount of taxes required to “run” the Federal Government?
Department of Education was established about the same time and was supposed to improve our children's test scores, etc. Forty years later what have they accomplished other than increasing the amount of taxes required to “run” the Federal Government?
Does any freeper have other Departments that have failed so badly over the last 40 plus years?
As a private citizen I try to avoid throwing good money after bad for more than a year or two. But our “elected” “professional” politicians see no problem doing that with our tax dollars. Every wonder why?
The numbers will drastically incresae after July 1.
This is me
Losing the mortgage interest deduction will raise our taxes by almost $6000 a year, and where is that supposed to come out of? What we are desperately trying to save for retirement?
I’m sure we are fairly typical of many who are squarely in the middle class
I stopped completely saving in my 401 after bamey was elected....why even do it?....I do believe that ultimately they’ll tax or index it.....instead, working on just paying bills...mostly the house....
They do that, and it’s Civil War II. I’m serious.
Several things are going on with this proposal.
First, the change would be a direct betrayal of the implied promise to millions of people who have been saving for retirement. The tax break, remember, is a reward or incentive for doing what the government wanted: saving for your own retirement. To change the rules for current savers would be a double-cross, a betrayal, a swindle, and a form of banditry. In private life, this would land you in jail for fraud.
The reason for allowing people a tax break on retirement investments was to allow before-tax growth of the savings. THEN the government taxes you at the end, when you take out the money as an elderly retiree. Note that if you are a poor retiree, you are in a lower bracket and don’t pay as much taxes as someone in a higher bracket. Note also that the government presumably profits in the end, because they participate in the successful result of your saving. They are taxing you, but at least they are doing it in a way which causes less harm that usual.
But now note that under the new plans, they will tax you first, before your savings have even grown. This gives you less seed for growth, and also gets the government less share in the results, because the ultimate harvest of your savings will be less.
Why would they do this? For the same reason that any drunken wastrel would rather spend today, and forget about tomorrow. Our increasingly profligate government has abandoned the prospective view: that is, they close their eyes to the future.
It is characteristic of the best in human nature to think beyond the narrow present: to learn from the Past, and to look toward the Future. Thrift is merely one tangible way of expressing this view; and looking toward an afterlife is a more sublime aspect of the same time-transcendant view of human existence.
The infant has neither. He cries for his wants, and then sleeps, only to awaken and cry again. One cannot expect a nation to survive, whose people have been conditioned to keep their development arrested at the infantile stage.
Dependence does not rule: it gets ruled.
So let's dirty up some other country, not our own. Yeah, that's the answer.
Look, it costs money to buy the votes of the corrupt and lazy... are you begrudging that? /s
So, tell us - have you stopped driving gasoline-powered vehicles?
That is why they are nationalizing the Nations oil business. They want to get some profits for their trouble.
The history of socialism is rife with good intentions leading to consistently bad results.
Let’s not let the globalists play us for third world idiots for a change, huh?
From your posts, it seems you'd rather get played for a socialist idiot.
If we have no guarentee of any benefit of drilling, then don’t drill here. It is as simple as that. It is a business caculation. Don’t host a risky operation in a bunch of people’s lives with no financial benefit and insurance to them for the inconvience and risk you cause.
My house goes down in value and people’s livlihood is wrecked for what in exchange? My taxes go up for loss of business. Good people’s families and wealth are wrecked. What do we get for this risk? A few jobs they offered on the rig (some of whom they murdered to save a buck in operations)? That didn’t help offset what they did to my life and the life of others who live and work here.
BP is stomping around the globe happy and profitable as can be with a mess in it’s wake. They do this all the time to third worlders. I suggest we not let them have the same deal here. We are not stupid, dirtboy. The Gulf is not their property. They have public leases to screw us up for nothing in return.
Here is what it is like. Let’s put an oil dump in your back yard and see how you like the property and business losses, cancerous gases, odor and death. All the profit goes to the dumping company and no one gives a crap about you becaue all that matters is the profit for the dumping company. In fact if you complain about it, you are an anti-capitalist so shut up and eat it. You should count yourself lucky that the dump truck driver has a job.
Maybe if we can publically torture and execute all the executives in the oil company and their Federal overseers if they cause a spill, that would be the insurance we need. Right now, they are frolicking in their limos and shaking us down in DC after what they did here.