Skip to comments.Obama plan: Cut tax breaks for richest retirement savers (Camel's nose under the tent)
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 ...
You know you want to.
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....
The best course for America is to cut Obama from the oval office
“if you like your 401k - you can keep your 401k”
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.
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.
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.
No one is really listening to this idiot anymore
If you like your 401k, CASH IT IN, now!!!
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
They make it very clear that until all taxes are paid in full, that isn't your money - it's theirs.
“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.
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.
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...
“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.
Obama deciding which people have earned too much money, what could go wrong? < /S >
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.
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.
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.
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.
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.
How about ending the EITC (I believe) where people get tax money back that they never even paid in the first place!
There are no tax deductions for IRA’s for high income people Oboobma.
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
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.
So, the One Billion Dollars (a year) that this new Tax Scheme will raise for the next 900 Years will pay for Obamas failed Stimulus Program.
Add in another Five Thousand Years to pay off all of Obamas Deficits.
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.
To encourage people to save, we will take people’s retirement money.
War is Peace
Freedom is Slavery
Ignorance is Strength
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.
Wait until bill gates and warren buffett find out a WEALTH TAX is coming.
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.
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.