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Obama plan: Cut tax breaks for richest retirement savers (Camel's nose under the tent)
Marketwatch ^

Posted on 02/22/2014 11:34:32 AM PST by Red in Blue PA

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. Read Companies bracing for 1-2 retirement punch .

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.

(Excerpt) Read more at marketwatch.com ...


TOPICS: News/Current Events
KEYWORDS: 401k; 403b; 457k; definedbenefitplan; definedcontribution; government; investing; ira; keoghplan; obama; obamarecession; obamaretirement; obamataxhikes; retirement; rothira
If they get this, they will keep pushing for the deductions to be eliminated for those who earn less, as more money is needed to feed the beast.
1 posted on 02/22/2014 11:34:32 AM PST by Red in Blue PA
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To: Red in Blue PA
Why not just kill them and redistribute their stuff, Barry?

You know you want to.

2 posted on 02/22/2014 11:36:17 AM PST by E. Pluribus Unum (Islam is a religion of peace, and Moslems reserve the right to behead anyone who says otherwise.)
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To: Red in Blue PA

We all know what is coming...

Government confiscation all of all pensions (unions and government workers exempted), 401k and IRA funds.

To be replaced with “guaranteed” government bonds.

It will be for the children.

And for the votes of the free sh*t army.

No one could have seen this coming....


3 posted on 02/22/2014 11:37:29 AM PST by 2banana (My common ground with terrorists - they want to die for islam and we want to kill them)
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To: Red in Blue PA

The best course for America is to cut Obama from the oval office


4 posted on 02/22/2014 11:38:04 AM PST by bert ((K.E. N.P. N.C. +12 ..... History is a process, not an event)
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To: Red in Blue PA

“if you like your 401k - you can keep your 401k”


5 posted on 02/22/2014 11:38:18 AM PST by 2banana (My common ground with terrorists - they want to die for islam and we want to kill them)
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To: 2banana

Starve the Beast.

Do everything you can to minimize taxable transactions. The only way our problems can be fixed is to starve the Beast knows as the Federal Government.


6 posted on 02/22/2014 11:39:42 AM PST by Red in Blue PA (When Injustice becomes Law, Resistance Becomes Duty.-Thomas Jefferson)
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To: Red in Blue PA

Oddly enough, I don’t see this as such a big deal. Basically, 401(k) and IRA accounts would be held to the same standards as pensions under Federal tax law — at least in terms of their tax deductibility.


7 posted on 02/22/2014 11:43:19 AM PST by Alberta's Child ("I've never seen such a conclave of minstrels in my life.")
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My wife and I have worked hard all of our adult lives for everything we have and obama wants to redistribute it to those who do not and will not work.


8 posted on 02/22/2014 11:43:29 AM PST by Graybeard58 (Welfare is a narcotic, a subtle destroyer of the human spirit. F.D.R.)
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To: Red in Blue PA

No one is really listening to this idiot anymore


9 posted on 02/22/2014 11:43:46 AM PST by italianquaker
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To: 2banana

If you like your 401k, CASH IT IN, now!!!


10 posted on 02/22/2014 11:44:04 AM PST by RoadGumby (This is not where I belong, Take this world and give me Jesus.)
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To: Graybeard58

He is panicking.

He is on defense with nothing but some sandbags and left over springfield rifles........ he is dredging around in the bottom of the barrel for some crap to sling

It really suks to be Obama


11 posted on 02/22/2014 11:46:40 AM PST by bert ((K.E. N.P. N.C. +12 ..... History is a process, not an event)
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To: Alberta's Child
Oddly enough, I don’t see this as such a big deal

Then you do not understand how these people work. This will be the first baby step on the path to no deductions at all for retirement plans. And eventually to outright confiscation if they ever get their way.

The left is never honest nor transparent about their long term goals.
12 posted on 02/22/2014 11:47:46 AM PST by Red in Blue PA (When Injustice becomes Law, Resistance Becomes Duty.-Thomas Jefferson)
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To: Red in Blue PA
Regarding tax-deferred accounts: "Ya put it where they can steal it, they're gonna steal it."

They make it very clear that until all taxes are paid in full, that isn't your money - it's theirs.

13 posted on 02/22/2014 11:49:50 AM PST by Mr. Jeeves (CTRL-GALT-DELETE)
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To: bert

“He is panicking.”

I’m not so sure. I think we’re up over 50% now of people on some form of government assistance who undoubtedly would like more and don’t care who it comes from as long as it’s not them.


14 posted on 02/22/2014 11:50:51 AM PST by freeangel ( (free speech is only good until someone else doesn't like it)
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To: Red in Blue PA
The AFT and the Teamsters (the unions protecting faculty and most administrators from competition on college campuses) will be exempted. The av. Administrator (Dean) makes the individual amt. indicated, and a household with married, full-time college professors would reach the amount discussed.
15 posted on 02/22/2014 11:51:11 AM PST by 4Liberty (Optimal institutions - optimal economy.)
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To: Red in Blue PA

I’ve found that if I assme the worst, the most extreme that the left could conceivably go, I’ll rarely be wrong. History, especially recent history, shows us that they work incrementally. Sometimes when they think they’ve come close enough to the goal or gotten a majority of the people (especially the “youth” or the large army of gibme constituency) on their side, they make a dramatic final push. Sometimes when they think they have an unassailable leader (as in a minority or female), they make a push in spite of an opposed majority. Sometimes when they’ve overrached, they pull back from the termite tunnel they’ve carved and start another one. But they never accept the will of the people until they manage to get enough on their side. If they never do, and they get an “Obama” in place, they don’t care. But they never stop.

It’s harder for conservatives, because we’re not trying to forge new paths, we’re trying to protect the foundation.


16 posted on 02/22/2014 11:55:57 AM PST by mrsmel (One Who Can See)
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To: Red in Blue PA

Just how does placing a “limit” on something generate a billion bucks of revenue?

Oh, by STEALING it from those to whom it actually belongs...


17 posted on 02/22/2014 11:58:42 AM PST by DJ Frisat ((optional, printed after my name on post))
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To: italianquaker

“No one is really listening to this idiot anymore”]

Right. Nobody has any money, Obamacare is the biggest bust since New Coke, and the Democrats aren’t going to sign on for any more uni-partisan legislation.

I don’t think this idea is going any where.


18 posted on 02/22/2014 11:59:14 AM PST by jocon307
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To: Graybeard58
My wife and I have worked hard all of our adult lives for everything we have and obama wants to redistribute it to those who do not and will not work.

Obama deciding which people have earned too much money, what could go wrong? < /S >

19 posted on 02/22/2014 12:01:24 PM PST by The Cajun (Sarah Palin, Mark Levin, Ted Cruz, Mike Lee, Louie Gohmert......Nuff said.)
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To: Red in Blue PA
Tax-deferred retirement plans haven't even been around for very long, so what's the big deal if you lose the tax deductibility of your retirement plan? If you look at it closely, the whole push for IRA and 401(k) plans was driven by Wall Street interests who saw this as a way to turn tens of millions of Americans into customers.

For what it's worth, there's a lot to be said for a plan to scale back on your contributions to these plans anyway. The tax-deductibility comes with some strings attached that make these plans less flexible for an astute investor.

20 posted on 02/22/2014 12:02:39 PM PST by Alberta's Child ("I've never seen such a conclave of minstrels in my life.")
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To: Red in Blue PA

Keep taking investment money out of the economy to redistribute it into the federal plantation, until everyone is on the federal plantation, and no one has investment money to redistribute. It never works out, but radical leftists, called Democrats, keep trying to prove it can.


21 posted on 02/22/2014 12:07:28 PM PST by pallis
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To: pallis

That’s funny. My Roth IRA went up to $6500. Limit is 5k but ‘catch-up’ limit for those over 50 went up from 6k. It’s stupid. Those that were too lazy to save when younger get rewarded later in life. At least the compounding won’t help them like it helped the rest of us.


22 posted on 02/22/2014 12:15:41 PM PST by DIRTYSECRET (urope. Why do they put up with this.)
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To: Alberta's Child
For what it's worth, there's a lot to be said for a plan to scale back on your contributions to these plans anyway. The tax-deductibility comes with some strings attached that make these plans less flexible for an astute investor.

This tax-deferred retirement plan was NOT designed for the “astute investor”. It was designed as (1) an alternate retirement vehicle for employers and (2) promote savings. If an employee is lucky enough to work for an employer who matches 50%-100% of the employee's payroll deduction that would be an easy 10% of gross annual income savings. That does not include the tax savings.

23 posted on 02/22/2014 12:17:33 PM PST by Chgogal (Obama "hung the SEALs out to dry, basically exposed them like a set of dog balls..." CMH)
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To: 2banana

Your post #3 is exactly right: it is only a matter of time. Barry might not have time, but his free s#*t army representatives will get it done.

They will Steal from the producers and give to their base for the children, etc.


24 posted on 02/22/2014 12:54:41 PM PST by The_Media_never_lie (The media must be defeated any way it can be done.)
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; cardinal4; ColdOne; ...

"You didn't build that retirement fund." -- President Zero

Thanks Red in Blue PA.
25 posted on 02/22/2014 1:01:09 PM PST by SunkenCiv (http://www.freerepublic.com/~mestamachine/)
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To: Red in Blue PA

How about ending the EITC (I believe) where people get tax money back that they never even paid in the first place!


26 posted on 02/22/2014 1:13:11 PM PST by Reddy (bo stinks)
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To: Red in Blue PA

There are no tax deductions for IRA’s for high income people Oboobma.


27 posted on 02/22/2014 1:14:22 PM PST by petercooper ("I was for letting people keep their health insurance, before I wasn't". --- Barack Obama)
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To: freeangel

The 50% includes me and all other social security folks.

To assume all old folks love their stuff and Obama’s lies better than is a serious error in judgement. It is to be duped


28 posted on 02/22/2014 1:15:33 PM PST by bert ((K.E. N.P. N.C. +12 ..... History is a process, not an event)
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To: Red in Blue PA

So, the One Billion Dollars this new Tax Scheme will raise for the next 900 Years will pay for Obama’s failed Stimulus Program.

Add in another Five Thousand Years to pay off all of Obama’s Deficits.


29 posted on 02/22/2014 1:21:58 PM PST by Kickass Conservative (Nobody owes you a living, so shut up and get back to work...)
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To: Kickass Conservative

So, the One Billion Dollars (a year) that this new Tax Scheme will raise for the next 900 Years will pay for Obama’s failed Stimulus Program.

Add in another Five Thousand Years to pay off all of Obama’s Deficits.

Revised...


30 posted on 02/22/2014 1:23:09 PM PST by Kickass Conservative (Nobody owes you a living, so shut up and get back to work...)
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To: bert

Are you kidding?? Just in my family alone, two out of four siblings have saved nothing for retirement. The majority will applaud zero and the dems as all of those tempting 401k’s are confiscated and redistributed “equally”. It’s only FAIRRRRRRR.


31 posted on 02/22/2014 1:50:22 PM PST by Reddy (bo stinks)
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To: Red in Blue PA

To encourage people to save, we will take people’s retirement money.

War is Peace
Freedom is Slavery
Ignorance is Strength


32 posted on 02/22/2014 1:51:01 PM PST by Rocky (The further a society drifts from the truth, the more it will hate those who speak it. George Orwell)
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To: Red in Blue PA

This is why I tell people they shouldn’t pay the taxes on an IRA and convert it to a Roth to any large degree.

Ten years from now some people are going to be sitting on huge (converted) Roth IRAs that are supposed to be exempt from all income taxes when withdrawn. All it will take is for a Democrat arguing “fairness” and pointing to someone withdrawing, say $50k from a Roth IRA of $1,000,000 to get a groundswell going to tax them in spite of what the previous law specified. Then they’ll end up paying the taxes twice.

Hell, it wouldn’t surprise me to see even our after-tax savings partially confiscated in the next financial panic. Greece has already done it, so the precedent is there.

One of Obama’s sorriest accomplishments is convincing a lot of people that contracts mean little anymore, especially when the government comes calling. And if he ever gets to appoint a liberal Supreme Court, they’ll mean nothing at all any longer.


33 posted on 02/22/2014 1:52:41 PM PST by Norseman (Defund the Left-Completely!)
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To: Red in Blue PA

Wait until bill gates and warren buffett find out a WEALTH TAX is coming.


34 posted on 02/22/2014 2:16:27 PM PST by LibLieSlayer (FROM MY COLD, DEAD HANDS! BETTER DEAD THAN RED!)
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To: Norseman

Norseman, I doubt they will change the rules on a Roth. Too politically risky. Besides, if they announce their intent to change the tax treatment of Roth funds, people will immediately draw them out while they are still tax-free, before the law can be changed and enacted. What will screw the folks who have big Roth balances is the enactment of a VAT. I’m a big Roth fan, but the thought of a “VAT in lieu of (or in addition to) income tax” scheme being passed in the future is what freaks me out. With a VAT, even withdrawing your Roth funds before they can change the Roth rules will not help, because the VAT will be the double taxation.


35 posted on 02/22/2014 2:27:15 PM PST by Panzerfaust
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To: Panzerfaust

All they have to do is say in April of a given year that Roth balances as of January 1st of the current year will be taxed at 40% upon withdrawal so long as the balance is greater than, say, $500,000.

The only people who will complain will be the ones getting the shaft. Good luck with that. As I said, Obama pretty much destroyed the concept of contracts. Now it’s just open season on the law. After all, look at Obamacare. 90% of it is now unconstitutionally “play it by ear” executive orders.

You’re right about the VAT. First pay taxes on income for savings. Then pay a new tax on purchases with those already-taxed savings. Drop the income tax at the same time, just to rub it in.

And an astute politician could appeal to the 20-40 crowd by arguing that this would get even with the older generations for loading them down with the national debt. He’d actually have a point too, so don’t be surprised to see it come up for serious discussion in a few years.


36 posted on 02/22/2014 2:52:04 PM PST by Norseman (Defund the Left-Completely!)
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