Thursday, October 23, 2008

Abolishing 401(k) Tax Breaks

Yikes, my 401(k) is in bloody mess nowadays as is most everyone else. However, this article is not going to stop the bleeding at all. In fact it may kill most 401(k) account altogether.

House Democrats Contemplate Abolishing 401(k) Tax Breaks.

Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.

House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.

A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. She testified last week before Miller’s Education and Labor Committee on her proposal.

At that hearing, the director of the Congressional Budget Office, Peter Orszag, testified that some $2 trillion in retirement savings has been lost over the past 15 months.

Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.

The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.


  1. Anonymous6:56 PM

    Where's the "Thou shalt not covet thy neighbor's goods" component of that Catholic Social Teaching stuff the pro-Obamabortion Catholics often prattle on about?

    Plus, I just can't find the passage in which Jesus tells the young man, "If you wish to help the poor, go to Rome and petition Caesar to impose even greater taxes." I just can't. Yet for the Catholic Socialist Teaching crowd that passage that's missing from my bible is nearly the entirety of their whole "seamless garment."

  2. amen...

    It seems that the whole 'wealth re-distribution' theory goes against the teachings of Christ.

    Yes Christ tells us, "if he asks for your cloak, give him the shirt off your back as well..."


    "whatever you do to the least of them, you do unto me..."

    however, does this mean give so they can accumulate wealth. I dont' think that's what Christ meant.

    What I'm mostly concerned with here is certain ideas legitimized with the election of an individual who will make this 'accululate wealth by taking from others' a lifestyle that the will change the attitude of 'giving'.

    'Taking' will be the new operative work for Americans and Christians who vote for this individual.

    This new vocabulary will not serve Caesar or more inportantly God well at all...

    Thanks for the visit Micha..

    WCC +<><