Skip to comments.Obama plan: Cut tax breaks for richest retirement savers
Posted on 02/21/2014 10:56:56 AM PST by reaganaut1
President Barack Obama plans to ask Congress in early March, as part of his fiscal 2015 budget, to reduce some of the tax advantages for employer-sponsored retirement plans for higher-income earners, according to published reports.
Plus, the president wants to limit the value of all tax deductions, defined contribution exclusions and IRA deductions to 28% of income and include an overall cap on all retirement accounts, including pensions, that could bring in $1 billion a year in new tax revenue, according to a Pensions & Investments report.
According to the report, the proposals are designed to direct more of the tax preference for retirement savings toward getting more low- and middle-income people into the habit of saving.
Based on current tax brackets, Pensions & Investments reported that the 28% limit would reduce the tax advantages of retirement savings for people earning more than $183,000 or couples earning more than $225,000. And the overall cap for all tax-preferred retirement accounts would limit them to providing an annual retirement income of $205,000, which would currently cap tax-preferred accounts at $3.4 million, but could go lower as interest rates rise.
So, who might feel the effects of this proposal? Largely, the top 5% of tax payers. According to the Tax Policy Center, a partnership between the Urban Institute and Brookings Institution, there are about 6.07 million Americans who earned above $200,000 in 2011 and they make up the top 4.2% of taxpayers, according to published reports. Read more about the presidents tax proposal here: Who makes more than $250k, and are they rich?
And what do experts have to say about what the president might propose? In the main, they say the rich need not worry that their tax breaks for saving for retirement will be cut.
(Excerpt) Read more at marketwatch.com ...
And the chance of the GOP-majority House considering this legislation is.....
Another Obama income redistribution scheme.
Haven’t you heard that Obama doesn’t need Congress, he has a phone and a pen and can rule by executive orders.
Since Caliph Baraq has established the precedent of changing the Obamacare laws every week or so unchallenged by anyone, is it possible he will able to do this with the tax code also?
“$1 billion a year in new tax revenue” amounts to about 2.4 hours of federal government spending. Where are we going to get the revenue for the remaining 364 days, 19.6 hours?
This only affects small business owners and wage earners.
It has no effect on 0dunga or any of his rich buddies or any of the corrupt-to-the-core creeps who got rich by being elected to government.
What a flaming jerk.
Who is this putz to dare declare how much is "too much" and set a cap on what I might save for retirement?
They’re always wanting to punish the poor bassturd that was smart enough to make something of himself to get where he is and steal whatever he has.
I despise communists such as this turd on a stick.
May his days be few and a incurable pox be upon him.
Except for higher-income earners whose employer was the feral government, of course.
No legislation, executive order!
I’m not sure, but I don’t think there has been a budget passed since he won election in 2008, or is it just HIS budgets that haven’t passed?
Maybe we need a Ukranian solution to this problem.
Tell the SOB to give up his first along with Pelozi and Rip Off Reid.
While I agree he is a putz, he is not capping how much you can save for retirement. He is proposing capping how much you can save in a tax-advantaged account.
I've said all along...we are going to be the old Russia with the Party people getting to take vacations on the Black Sea and the workers fighting for food in near empty groceries....
Exactly. There's never any justification for proposed tax increases, never any goal, purpose, or limit; a tax increase is to generate more revenue for the government, and that should be enough reason in King Obama's eyes.
it still is a disincentive to work harder and earn more and save more....
Message: Don’t be responsible and save for your retirement. Be dependent on the government. I despise this regime.
$1 billion? Chump change. Just spend $1 billion less. Don’t tell me that’s hard in a $4.5 trillion budget!
Oh, I forgot, I’m a radical extreme conservative for even thinking that.
Russia has a 13% flat tax...
Superpower Role Reversal And The Flat Tax Miracle
“Socialism: While the U.S. punishes millionaires, Russia and China reward them. In the upside-down era of Barack Obama, the capitalists act like communists and the communists act like capitalists.
Our multimillionaire president frowns on “millionaires and billionaires” and soaks them with higher taxes.
“Take note, Mr. President: Russia’s flat-tax miracle has helped bring its budget back into balance. Its revenues from income taxes have more than doubled since the single, low tax rate was instated.”
Lower tax rates result in more revenue — Obama is on record of saying that he is more interested in punishing the rich, than really increasing revenue — he said that in an interview before becoming president.
It begins. This is a thinly disguised way of confiscating money saved by hard-working individuals.
If this isn’t stopped, oh what’s the use! The American public is too stupid to care.
the president wants to limit the value of all tax deductions, defined contribution exclusions and IRA deductions to 28% of income and include an overall cap on all retirement accounts, including pensions
There's already a cap on what I can contribute to my tax-deferred account per tax year (I think $23K for me, this year).
If I have a 401K, an IRA and a pension... he wants an "overall cap".
I see what you are saying, and it’s true. However, I would worry this puts us on a slippery slope to going beyond just tax advantaged retirement savings, setting income levels, etc. And going beyond that.
The thief in the White House clearly intends to steal every dime in America that isn’t hidden under the mattress.
Then come for the mattresses.
And now, if any news organization dares to report it, the FCC Police will be there in a hurry.
“According to the report, the proposals are designed to direct more of the tax preference for retirement savings toward getting more low- and middle-income people into the habit of saving.”
Right, because every fool knows that sticking it to the rich for doing the smart thing ALWAYS motivates the American Idle to wise up and do the smart thing, too.
Would you make abysmal stupidity FATAL for just ONE DAY?
“that could bring in $1 billion a year in new tax revenue”
and the total budget, the total deficits and the total debts are what?!?!?
is this a financial proposal?
no; its ideological; it’s about “income inequality”
That would be "Caliph Baraq the Foist" to you.
Nyuq, nyuq, nyuq...
Will this be retroactive? Whatever is bad for the stock market is good for America./s
And the chance of the GOP-majority House considering this legislation is.....
Who really knows? Does anyone know what the feckless GOP will do on anything? Its a party without convictions that stands for nothing.
Intended to excite the base for Nov.
They’ll have to pass it to see what’s in it.
But whatever this legislation is, you can be sure it will put us on a long slippery slope as America continues its slide into the abyss.
No, the message is don’t put your assets in places where the Commie cork soakers know where it is at.
IMHO this is just a first step, the second is conviscation of private retirement funds because they are risky. They’ll take ownership and then send out a little of your savings every month to all those fine outstanding citizens in Section 8 Housing and the freshly minted Border jumping Criminal invaders.
To spread the wealth...
Right. Because the majority of the idiots are going to do just like they did with Obamacare. They're going to think somebody else is going to get gouged, not them. Right up until they realize anybody who has a retirement account qualifies as the "evil rich" who needs to have it confiscated. Then, they'll start screaming, like they are now with Obamacare. And it will be too late.
I also just realized that my math is bad. should be 21.6
I wonder if this would affect Roth IRAs, which are pre-taxed. It must really irritate the feds that they can’t get any more money when those IRAs are cashed in.
This is how the government creates classes of citizens.
The question most people ask themselves this day is not, how hard do i have to work to be successful?
Instead it is: How poor do I need to become to avoid the wrath of the federal government?
Punish those who scrimped and saved their whole lives so that they wouldn’t have to have dog food for supper when they reach 65, so those who lived like dogs can have ‘their fair share’......................
As it will be in the future, it was at the birth of Man-—
There are only four things certain since Social Progress began:-—
That the Dog returns to his Vomit and the Sow returns to her mire,
And the burnt Fool’s bandaged finger goes wabbling back to the Fire;
And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!
Punishing people who are responsible- the leftwing way
“I wonder if this would affect Roth IRAs, which are pre-taxed. It must really irritate the feds that they cant get any more money when those IRAs are cashed in.”
They already changed that to tax the earnings on your Roth IRA.
“They already changed that to tax the earnings on your Roth IRA.”
What? I completely missed that one. Can you post a source for those of us that can’t keep up with all of the evil this administration is perpetrating on the citizenry?
Public “servants” and unionistas to be exempt of course.
FUBO!! We worked hard and saved for our retirement — and were taxed along the way — federal, state, local, real estate, and on and on. Now, you are going to take our hard-earned money away through MORE taxes!! Again I say — FUBO!!
That is what my financial advisor at Edward Jones said.
I wanted to convert a regular untaxed IRA to a Roth IRA in amounts that would be un-taxable each year. Just draw to the limit that wouldn’t be taxed and stuff it back into a Roth.
She laughed and said they got wise to that trick and you couldn’t do it anymore.