Democrats Have A New Plan: Privatize Social Security And Kill The 401K..

Posted by on 10/23/2008

Hey, where did we hear that before?  Based on those links, we know that the left thinks it’s a bad idea..Okay, but what if you nationalize the existing 401K accounts:

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.  :

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.

Those tax breaks are an incentive for the employer to match the contibution of the employee, which is major benefit to employees that can not afford to put a lot into their accounts.

Ed:

That means your employer can no longer write off their contributions to your 401(k), and your capital gains would be taxable year-on-year.  In other words, it becomes just another investment or savings account, with no tax benefit at all, and no employer contribution.  Instead, Uncle Sam would give you your “matching” funds ” up to a whopping $600 per year!  Whoopee!

As Michelle Obama says, you could buy a pair of earrings every year : except, of course, you can’t.  It’s in The Lockbox, defined by politicians as Locked Away from You but Accessible to Us.  It goes there along with 5% of your gross earnings, apparently to play with the 7% of your gross earnings that already goes to Social Security.  And what do they do with the money?  They give you government bonds as your only investment option.

Maybe you’ll be lucky, and they’ll have Franklin Raines running the agency issuing those bonds.

Via Q&O

I don’t ever want to hear another word about “greedy Wall Street”. Democrats in Congress have been trying to find a way to get at the huge pool of money for decades

Goldwater Girl:

Remember, this isn’t the first time this has come up (thanks for the reminder Neal) – taxing 401Ks was in the works in 1994, the Congressional elections of 1994 stopped it.

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Democrats, General Politics, National News, Presidential Election '08, Social Security,

27 Comments.

  1. Faultline USA - trackback on 10/23/2008 at October 23, 2008 - 11:32 AM
  2. Conservative Cat - trackback on 10/23/2008 at October 23, 2008 - 12:48 PM
  3. third world county » People of the Light? - pingback on 10/23/2008 at October 23, 2008 - 01:55 PM
  4. third world county - trackback on 10/23/2008 at October 23, 2008 - 01:55 PM
  5. Obama locks up key endorsements « nn&v - pingback on 10/23/2008 at October 23, 2008 - 11:20 PM
  6. The Pink Flamingo - trackback on 10/24/2008 at October 24, 2008 - 12:30 AM
  7. Adam's Blog - trackback on 10/24/2008 at October 24, 2008 - 12:32 AM
  8. An Unrighteous Wind | Adam's Blog - pingback on 10/24/2008 at October 24, 2008 - 01:15 AM
  9. Rosemary's Thoughts - trackback on 10/24/2008 at October 24, 2008 - 01:16 AM
  10. Rosemary 10/24/2008 at October 24, 2008 - 01:25 AM

    Hi. I got tired of writing about politics for a day, so I wrote about my adventure to the optotristian. Oh yeah. lol. Great post you’ve written, as usual. ;)

  12. Democrat=Socialist - trackback on 10/24/2008 at October 24, 2008 - 11:12 AM
  13. Democrat=Socialist - trackback on 10/24/2008 at October 24, 2008 - 08:09 PM
  14. The Pink Flamingo - trackback on 10/25/2008 at October 25, 2008 - 02:00 AM
  15. snowy egret 10/25/2008 at October 25, 2008 - 10:45 AM

    The demacrtaic party of tyrany and and dictatorship truly they are the axis of evil THEY ARE THE SITH LORDS:o

  16. McCain’s Brother HATES Traffic Jams! | Democrat=Socialist - pingback on 10/25/2008 at October 25, 2008 - 11:45 AM
  17. Who’s Backing Barack Obama? | Democrat=Socialist - pingback on 10/25/2008 at October 25, 2008 - 08:01 PM
  18. killdemos 10/25/2008 at October 25, 2008 - 09:20 PM

    buy guns while you still can. It is going to come to kiling these democrat socialaist traitor scum…

  19. AKD 10/26/2008 at October 26, 2008 - 12:04 PM

    Gotta love politics… :) >-

  20. Right Truth - trackback on 10/26/2008 at October 26, 2008 - 02:12 PM
  21. Woman Honor Thyself - trackback on 10/26/2008 at October 26, 2008 - 09:55 PM
  22. Conservative Cat - trackback on 10/26/2008 at October 26, 2008 - 10:08 PM
  23. The Pink Flamingo - trackback on 10/27/2008 at October 27, 2008 - 01:00 AM
  24. DaveB 11/6/2008 at November 6, 2008 - 03:06 PM

    Thank you Obama supporters. $600 matching Govt Contribution, Huh? That means that anyone making $12,000 a year or more is out of pocket. (5% of 12,000 = $600) That breaks down to $6.25 an hour which is well below minimum wage. That means that even the working poor get screwed. So much for the promise that anyone who earns less than $250,000 won’t see a tax increase. Somebody need to start a blog on broken campaign promises. I think it will be pretty long……….

  25. Rick conway 11/6/2008 at November 6, 2008 - 03:32 PM

    From here to his birth place of africa

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