Heh. The proposal would basically leave the retirement accounts of probably 99.9% of Americans unchanged. Nor would it demand any "suffering" from the remaining .01%, unless you count reduced opportunities to scam the system as "suffering" or paying taxes as "theft".
The usual raving in this thread is just another example of how rank & file Righties worship their oppressors, the lootocracy, and want to be just like them. They even believe they will be, but only if they worship hard enough, thus enabling the looting of their own possibilities. They're willing victims of the cruelest political hoax of all times since the divine right of Kings fell out of fashion.
The usual raving in this thread is just another example of how rank & file Righties worship their oppressors, the lootocracy, and want to be just like them. They even believe they will be, but only if they worship hard enough, thus enabling the looting of their own possibilities. They're willing victims of the cruelest political hoax of all times since the divine right of Kings fell out of fashion.
Brovane
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Not sure what people such as yourselves are smoking - putting our money in a 401k does not avoid taxation. Quite the contrary, and could be quite the opposite. That is where people actually invest in ROTH 401k and ROTH IRA's for an advantage. Quite the risk actually, if you're set to retire and it starts during the next WW3 and tax is up to 75%... yeah, you will be paying that tax on it. Your only advantage is the ability to dictate how much you pull, hence determining what bracket you are in (assuming you can live within those means).
When you pull cash out, you have to pay taxation - I really think some people here need to do some basic accounting research before pulling shit out of their ass in a post about retirement accounts. But then again, I guess that's why we are in the situation we are in
I am not smoking anything. 401k and IRA are pre-tax money. Well Pre Federal Income Tax and you get to defer your tax. The basic rule of thumb that it usually always better to defer paying a tax when you can. Now over the last several years some of this has started to change in regards to tax deferral because their is a believe that long term tax rates are going to need to go up. That is why Roth IRA's have become more popular in the last several years. I am well aware that a regular IRA and 401k only defers the income tax you have to pay.
Then why make it a law at all? Why put one more useless law on the books? Liberals have always been about keeping the middle class from becoming the upper class. This law is just one more example.
Here's the paper.
http://obs.rc.fas.harvard.edu/chetty/ret_savings.html
From the summaries that I've read, there is a very slight increase. Certainly not worth the money that's earmarked for those programs.
IMO, there is no way to nudge people to become savers through tax incentives. If we don't want to be libertarian about it and let them starve, we should go the complete opposite direction and increase social security to a level which would provide an adequate retirement income.
You can save money faster if you are not paying taxes on it. It lowers your income and you pay less tax every month. Eventually they get the money back. When you withdraw funds it is taxed as income. You are just delaying taxation. However, if you pull it out slowly after you have less income you will pay less tax. The trick is not to get carried away. Use your SS and use the savings sparingly. Some plans like an IRA force you to start spending it at 70.
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Why increase SS? The feds steal the SS money and put it in the General Fund. Until they quit doing that they dont need anymore money to waste in the general fund.
And the fix for this would be a "lock box" buried in the White House lawn?
The total dollar amount may be "less", but the way the US government spends money, the "rate" may actually turn out to be more than current rates.
You, Congress nor Nostradamus can tell us what tax rates will be in the future.
Savers may be "rewarded" by deferring tax on income at a lower rate and withdrawing those funds under a higher rate.
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:hmm: So your idea of a paper we should base the incentive policy for lower, middle and upper class Americans' retirement savings on is one that looks at a programs in Denmark, paticularly their top tax bracket? I would have thought it would be obvious that there are more than a couple large flaws with that thought process esp given the large differences in social programs offered and different savings habits among the different wealth levels and countries
I should note that the ERBI has serveral issues with their findings:
http://www.ebri.org/pdf/notespdf/Notes.Jan13.FinalFlow.TxIncns.pdf
This is not to say it might not be the case but I think it would warrant an actual study in America before making a decision to scrap tax advantaged accounts all together
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On thing for sure about savings plans is 6% will not equal retirement. It should be more like 12% and it should not be tax deferred, it should be tax free. If I was starting out today at my first job, I would suggest you use a Roth IRA. Just pay your taxes up front, and pay no taxes later.
The thing about a Tax Deferred savings plan is there are a few different kinds and if you just make enough money to go to a higher tax bracket, just save more and have it not be counted for income so you will be in the lower tax bracket. It can make the difference between paying a lot of tax and a little tax.
The thing about a Tax Deferred savings plan is there are a few different kinds and if you just make enough money to go to a higher tax bracket, just save more and have it not be counted for income so you will be in the lower tax bracket. It can make the difference between paying a lot of tax and a little tax.
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Also once you retire your income should drop and lower your tax brackets. So unless tax rate go up at such a rate that you pay more in lower brackets int eh future or you have more income coming in during retirement, tax deferred might work out better.
That's not how income taxes work.
Only the income over the amount needed to enter the next tax bracket is taxed at a higher rate, so saving just enough to put all of your income in the lower bracket will result in a trivial tax difference.
Deferred accounts are at their most valuable if much of your current income is in higher tax brackets.
Why? Because the schemers & scammers must be restrained from ripping off the govt and the rest of the taxpayers. Simple. Might as well ask why there's a law against murder when it's so rare...
As for the rest of it, the chances of middle class people being able to exceed the proposed cap on their tax deferred retirement savings is a complete non sequiter, and the swipe at "Liberals" just a smear, a form of the usual denial via strawman. When you have no argument against what somebody else said, just make up something you'd rather they'd have said, argue against that in the usual smug self satisfied way.
And never even figure out what you've done, because there's no emotional satisfaction in realizing you're wrong.
It's true that any economic study can have some flaws. That's why it's nicknamed the "dismal science", after all.
I'm not saying that this study is the last word on this matter but it definitely takes a position that subsidies are not worth it. So let's see other studies come up with a different position.
Personally, my behavior wouldn't change even if the tax advantages went away. My belief is that this is the same for most people.
How is retirement deductions in any way a "subsidy"? Unless you believe it was the government's money to begin with.
Explain thyself liberal!
Explain thyself liberal!
Brovane
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It is a subsidy like when you are allowed a extra deduction for purchasing a electric car on your taxes. Or when you are allowed to write off mortgage interest on your taxes.
A deduction is NOT a subsidy.
A CREDIT is a subsidy.
That is money I earned, you are not subsidizing anything.
Brovane
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How is a credit a subsidy then? You can only get credit up to what you owe on taxes for a electric car purchase. If you only owe $5,000 in taxes and you get a a credit of $7500 for the purchase you don't get $7500 back you only get $5000 back. After all I am only getting the money back that I earned.
Brovane
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While technically correct, the distinction is merely semantic. Both mechanisms operate to change behavior in a desired direction. Both effectively reduce one's taxes & govt revenue in the short run.
Although indirect, tax breaks on retirement accounts subsidize Wall St, regardless of the fortunes of the small investors involved. Win or lose, they take their cut off the top. All that money provides grazing for the lootocracy that they otherwise wouldn't have.
No. The distinction is extremely different and not the same thing at all.
So, how is a deduction a "subsidy"? Explain that liberal.
Asked & answered, Spidey. Your willful lack of reading comprehension marks you as a zealot of the idiotic kind.
Do you know what a subsidy is?
Your answer of the difference between a credit and a deduction show you have no idea what you are talking about.
To the liberal, it's not your money.
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http://en.wikipedia.org/wiki/Subsidy
http://en.wikipedia.org/wiki/Tax_credit
You were raving about something... I forgot what, given its triviality...
When do you figure you'll hit the tax deferred limit, anyway? I figure never...
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