Why be personally responsible in saving for retirement?

Lithium381

Lifer
May 12, 2001
12,452
2
0
Why should I delay my gratification, saving for years and years to make sure that I'm comfortable in my old age when the "government" can decide that I don't NEED that much money in my IRA (greater than 3 mil) and tax it away. I didn't buy a nice house, a nice car, or live a lavish lifestyle for 30 years so that i would be comfortable when i retire . . . and then get slapped in the face.

on the other hand, i could live it up and not save a dime and when i retire qualify for public benefits and survive on someone else's hard work...

what is the incentive to be responsible in this case? I'm seeing more and more reasons that there is no need to be responsible for yourself, it's always up to someone else. I understand that we live in a society but there has to be some expectation of personal responsibility. at what point can government decide i don't NEED something for which i worked for and sacraficed in order to achieve?
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
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Oct 30, 2000
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Living on tbe public dole will have lesser quality lifestyle than you are accustomed to.

Have it now and suffer later for a longer time or squeeze now, rug the takeaway system and enjoy not having to worry
 

fskimospy

Elite Member
Mar 10, 2006
87,989
55,398
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Why should I delay my gratification, saving for years and years to make sure that I'm comfortable in my old age when the "government" can decide that I don't NEED that much money in my IRA (greater than 3 mil) and tax it away. I didn't buy a nice house, a nice car, or live a lavish lifestyle for 30 years so that i would be comfortable when i retire . . . and then get slapped in the face.

on the other hand, i could live it up and not save a dime and when i retire qualify for public benefits and survive on someone else's hard work...

what is the incentive to be responsible in this case? I'm seeing more and more reasons that there is no need to be responsible for yourself, it's always up to someone else. I understand that we live in a society but there has to be some expectation of personal responsibility. at what point can government decide i don't NEED something for which i worked for and sacraficed in order to achieve?

Have you tried living on those sweet sweet benefits? If you think you don't need to save for retirement because they will have you living on easy street you might be in for a rude awakening.
 

DaveSimmons

Elite Member
Aug 12, 2001
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when the "government" can decide that I don't NEED that much money in my IRA (greater than 3 mil) and tax it away.

More accurate statement:

The Obama administration proposed that you would only be allowed to keep enough in tax-sheltered accounts "to finance an annuity of not more than $205,000 per year"
http://blogs.marketwatch.com/encore/2013/04/10/obama-budget-would-cap-iras-at-3-million/

My response:

a) Social Security pays out a lot less than $17,000 a month to retirees.

b) the ebil gubment wouldn't snatch away 100% of the excess, you'd just be forced to withdraw it and pay regular income taxes. Though if you're getting over $200K in growth the last bit would be taxed at 32% unless it's money from a Roth IRA and is withdrawn tax-free.
 

Moonbeam

Elite Member
Nov 24, 1999
74,760
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Behold the fowls of the air: for they sow not, neither do they reap, nor gather into barns; yet your heavenly Father feedeth them. Are ye not much better than they?
 

DaveSimmons

Elite Member
Aug 12, 2001
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Actually, some birds earn their keep by distributing seeds along with little clumps of fertilizer to help them grow, while others help control insect populations that would otherwise threaten crops.
 

DrPizza

Administrator Elite Member Goat Whisperer
Mar 5, 2001
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www.slatebrookfarm.com
I don't think the OP holds much merit. It completely ignores that there's no prohibition on saving more than 3 million; merely that there's a limit to the generosity of the government in not taxing a significant chunk of income.
 

Craig234

Lifer
May 1, 2006
38,548
350
126
Lithium, you repeatedly approach things with an ideological bias that distorts the issue.

Question: before Social Security, were the 90% of the people who were elderly and in poverty just irresponsible spendthrifts with no one to blame but themselves?

No, they weren't. Policies were such that people's incomes, and expenses, were set at levels making poverty very difficult to avoid - this suited the wealthy just fine.

Then policies were improved to build a middle class.

The people who want our country to continue to shift wealth to the top again from everyone else, including you, use arguments like yours to fool people.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
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Oct 30, 2000
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Take the $3M in assets and turn excess into local muni bonds.

Tax free income and it also assists your local community
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
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Oct 30, 2000
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Lithium, you repeatedly approach things with an ideological bias that distorts the issue.

Question: before Social Security, were the 90% of the people who were elderly and in poverty just irresponsible spendthrifts with no one to blame but themselves?

No, they weren't. Policies were such that people's incomes, and expenses, were set at levels making poverty very difficult to avoid - this suited the wealthy just fine.

Then policies were improved to build a middle class.

The people who want our country to continue to shift wealth to the top again from everyone else, including you, use arguments like yours to fool people.

And how does having retired people at poverty help the wealthy :confused:

People like you want to STEAL wealth and hand it over to people that are unable for multiple reason (majority by choice) to improve themselves.

So instead of tbe Progressive/liberals showing/helping them how to better themselves, they try to create a reoccurring lower class that is dependent on handouts taken from the wealthy. Of course, reaching into the progressive pocket is taboo :thumbsdiwn,:
 

DaveSimmons

Elite Member
Aug 12, 2001
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670
126
I don't think the OP holds much merit. It completely ignores that there's no prohibition on saving more than 3 million; merely that there's a limit to the generosity of the government in not taxing a significant chunk of income.

Exactly. It also implies that social security and safety net programs are together as good or better than having $200K a year in retirement income (not savings).
 

Craig234

Lifer
May 1, 2006
38,548
350
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And how does having retired people at poverty help the wealthy :confused:

The fact you don't understand that goes a long way to explaining your political positions unwittingly defending those bad policies.

Let'sd try to give you a simple answer. In the short term, there's a pie of wealth. It's zero-sum.

The 1% most wealthy can have 50% of the pie, and elderly retired people can have 5%.

Or, the most wealthy can have 54% of the pie, and elderly retired people can have 1%.

The larger percent of all wealth own, the greater your relative wealth, the larger share of all wealth you have. Wealthy people generally tend to like to have a larger share.

Hence, look at human history and it's filled with societies with a few people have nearly all the wealth, while there is massive poverty among most.

The US was and is an experiement that adjusts that, creating the artificial power of a "vote", which in theory gives a poor and rich man the same amount of power, one vote.

That's a very 'progressive', 'enlightened', 'liberal' way to say the wealthy can't just have all the welth and power. The very definition of the United States is 'redistributionist'.

And that's led to the US being the envy of most of the world, eventually, with its prospering middle class who FORCED a larger share of wealth into their hands - not into some extreme communist system without rich people but into a country with both wealthy and a thriving middle class.

But since Reagan, that power has shifted back to the top and we've been sliding back. That's why wages are stagnant for 30 years while the rich skyrocket in wealth. It's why when we had an economic disaster that destroyed 40% of the wealth of most Americans, the stock market has more than recovered. doubling in value, but the top 1% have taken 93% of the entire economic recovery.

The wealthy benefit by the elderly being in poverty for the simple reason that it increases the share of wealth the wealthy have.

Now, we could discuss the harm to economic growth and the size of the pie by short-sighted policies that cause extreme concentration of wealth.

But those concerns don't seem to affect policy much or to cause much concern for the wealthy who just pursue more for themselves, so not much point.

People like you want to STEAL wealth and hand it over to people that are unable for multiple reason (majority by choice) to improve themselves.

No, you're an ideologue who buys into dogma leading you to make such false (and offensive) attacks because you think every policy that results in transferring wealth TO the top 1% is good, justified, well earned, while every policy that transfers wealth FROM the top 1% is 'stealing'.

That's an ignorant, warped view coloring your politics.

You have no idea what a good balance of wealth distribution is nor how to have it - you are just blindly fighitng for policies that will result in plutocracy.

So instead of tbe Progressive/liberals showing/helping them how to better themselves, they try to create a reoccurring lower class that is dependent on handouts taken from the wealthy. Of course, reaching into the progressive pocket is taboo :thumbsdiwn,:

The ignorance here is too massive to even make a dent on.

Progressives are the ones who supported massively increasing public education - which increases economic growth. A safety net not only has moral benefits - it is highly economically efficient at keeping people productive instead of having temporary problems devastate them. Any 'culture of dependancy' is more in your dogma than in the facts, and it's not nearly as impacting or expensive as your ideology misleads you to believe.

In fact the policies of the right are the ones that generally shrink the pie - the excessive concentration of wealth leads to *underinvestment*, *fewer* entrepreneurs, all kinds of things that reduce the size of the pie in order to put the protection of the huge slice held by those at the top above the interests of society and the economy.

I don't mean to offend, but you need to think about that more than I do before you throw around words like 'theft' and 'stealing' - and ignorance is not meant to insult, but describe.

One of the common tactics of the people who want to oppose the public good is to attack with perverse claims.

'The Environmental Protection Agency INCREASES pollution'. 'Gun Control INCREASES murder'. 'Anti-poverty programs INCREASE poverty'. 'Seat Belts CAUSE you to get killed in an accident'. And so on.

Now, that last one is so simple and easily debunked, it's good to use as a model, because it's the same type of argument, but illustrates the problem well.

Any of these arguments usually has a grain of truth to them - but it overall false. There are cases where seat belts cause people to be killed, who would't have. There's the guy who is 'thrown free during the accident and is ok, while his friend in the seat belt did not escape and burned'. The thing is, ON AVERAGE, the seat belts save far more lives.

People generally understand that, and the money spent by a special interest to argue the wrong position isn't much, about zero at this point, so not many people buy that one anymore.

But it's the same thing with the others - which are far more well funded.

Now, they have variations. For example, tobacco companies started out with claims that 'the science isn't conclusive' they argued for a long time; followed by 'it's about personal freedom'.

Companies who want to make more money by opposing climate change efforts don't usually argue 'that actually INCREASES the problem', but they do argue the similar claims, 'the science isn't totally conclusive', and 'it'll cost a fortune for programs that won't actually help with the problem'. Just play on people's ignorance and doubts enough to get them to vote the wrong way.

That's one of the variations here - nevermind the actual pros and cons of the policies, it's just people who want to STEAL from the deserving people, distorting just about every part of the issue.

Fact is, we've seen huge, and radical, changes to our policies shifting the costs of our society from the wealthy and corporations to the people, and shifting the riches the other direction.

If there's any 'theft' going on, it's by the people who have shifted so much larger a share to themselves from the rest of society.
 
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Lithium381

Lifer
May 12, 2001
12,452
2
0
I don't think the OP holds much merit. It completely ignores that there's no prohibition on saving more than 3 million; merely that there's a limit to the generosity of the government in not taxing a significant chunk of income.

the government is LETTING ME KEEP WHAT I EARNED? How absurd is that?

If taxes were paid up front, or will be paid when I withdraw (depending on the structure of the account) then why are they saying in retirement I shouldn't earn more than 205k annually on those accounts?

What is the logic?

And this signals to me another problem, sounds like Cypress. We trusted the government when we put our money in these accounts in the first place. . . Now AFTER the fact they want to change the rules. The article linked a few posts up mentions the average household has 120k in retirement. . . . what if uncle sam just decides $100k is the max. Is everyone SOL. At what point can we trust that money we put aside for out own well being will not be "stolen"?
 

Lithium381

Lifer
May 12, 2001
12,452
2
0
Lithium, you repeatedly approach things with an ideological bias that distorts the issue.

Question: before Social Security, were the 90% of the people who were elderly and in poverty just irresponsible spendthrifts with no one to blame but themselves?

No, they weren't. Policies were such that people's incomes, and expenses, were set at levels making poverty very difficult to avoid - this suited the wealthy just fine.

Then policies were improved to build a middle class.

The people who want our country to continue to shift wealth to the top again from everyone else, including you, use arguments like yours to fool people.
That's not what I want . . .
 

Carmen813

Diamond Member
May 18, 2007
3,189
0
76
And how does having retired people at poverty help the wealthy :confused:

People like you want to STEAL wealth and hand it over to people that are unable for multiple reason (majority by choice) to improve themselves.

So instead of tbe Progressive/liberals showing/helping them how to better themselves, they try to create a reoccurring lower class that is dependent on handouts taken from the wealthy. Of course, reaching into the progressive pocket is taboo :thumbsdiwn,:

I work in mental health. Is it really a surprise that our country has so many severe problems with mental health issues when so many consistently blame people for not trying hard enough? We continue to feed into these myths that hard work equals success and that if you fail just try harder and you will succeed. I am absolutely unsurprised by the extreme acts of violence we have experienced over the past years - violence is one of the natural byproducts of creating tremendous feelings of powerlessness. It's the effect of a fundamentally unwell society and culture.

Eaglekeeper,
I'm going to pick on you a bit with this post but I'm doing so to make some broader points.

It's a very classist to state that that poor people choose to be that way. That is the myth of meritocracy - the belief that hard work equals success. It doesn't. Many people in this country work extremely hard and are unable to break out of poverty. For some, that poverty has lasted generations. Institutionalized and cultural racism, classism, ableism, sexism, heterosexism, ageism all create real barriers to financial success in this country. To say you could simply "choose" to overcome those obstacles is absurd. It takes extreme resiliency to overcome those barriers. Let's say you have none of these barriers - you are still faced with the reality that our society's entire economic system is driven by the idea of "winners" and "losers."

I find the "liberals are all about creating a dependent class by giving handouts" argument appalling. It implies that poor people are too stupid to recognize they are being duped. It's also contradictory to state that "most people choose to be poor" and then state it's all the fault of government hands outs. With the cultural and systemic barriers that exist in the United States today it is not surprising that most people simply give up hope and throw in the towel. Our culture fosters hopelessness.

As for how having retired people in poverty helps the wealthy that is fairly straightforward to explain. It is a classic tactic of those with privilege and power to turn those without it against each other. That prevents them from uniting and confronting their oppressors. In other words, facilitate a distraction from broader issues. If you want a specific example, look at the history books and the Voter suffrage movements - black men were systematically turned against women to delay women from having the right to vote.

It's a pretty simply recipe. Foster resentment among the lower classes to keep them sniping at each other, it's a very easy way to avoid getting caught in the crossfire. Add a nice cultural heap of bullshit that keeps everyone waiting for the day that they will "be rich." It adds a nice balance of small false hope - while ignoring the reality that it's hard to give a damn about broader issues when you are struggling to eat and shelter yourself every single day. Toss on a nice layer of fear for good measure about what might happen if things were to change.

I imagine it sounds like I'm talking about a conspiracy. I suppose in a way I am, but my real point is this: always question the broader narratives that exist in society. These messages are the root of our societal struggles. Some people may choose to be poor, simply because they never really had any other choice.
 
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DaveSimmons

Elite Member
Aug 12, 2001
40,730
670
126
the government is LETTING ME KEEP WHAT I EARNED? How absurd is that?

If taxes were paid up front, or will be paid when I withdraw (depending on the structure of the account) then why are they saying in retirement I shouldn't earn more than 205k annually on those accounts?

What is the logic?

And this signals to me another problem, sounds like Cypress. We trusted the government when we put our money in these accounts in the first place. . . Now AFTER the fact they want to change the rules. The article linked a few posts up mentions the average household has 120k in retirement. . . . what if uncle sam just decides $100k is the max. Is everyone SOL. At what point can we trust that money we put aside for out own well being will not be "stolen"?

This is just e limit is on how much you can keep in tax-sheltered accounts. You can have $11 billion in regular brokerage account, and only pay regular income taxes on it.

It's saying that once you've sheltered $3 million from regular taxes, you can't have any more there, it has to go into your regular brokerage account.

The Roth limit is under $6K a year, and the 401k limit is under $15K, so normal retirement savings for the middle class are not likely to reach the $3 million tax shelter limit.

If you somehow managed it, you would just not be able to keep making Roth and 401k contributions, and you might be forced to withdraw money.

If it was Roth contributions, then that withdrawal would be tax free. If it was 401k contributions, you'd pay the income taxes that you avoided paying at the time you put the money in.

This isn't "the government stealing your monies", it's the government limiting how much income you can shelter from normal taxes.
 

Doppel

Lifer
Feb 5, 2011
13,306
3
0
Why should I delay my gratification, saving for years and years to make sure that I'm comfortable in my old age when the "government" can decide that I don't NEED that much money in my IRA (greater than 3 mil) and tax it away. I didn't buy a nice house, a nice car, or live a lavish lifestyle for 30 years so that i would be comfortable when i retire . . . and then get slapped in the face.

on the other hand, i could live it up and not save a dime and when i retire qualify for public benefits and survive on someone else's hard work...

what is the incentive to be responsible in this case? I'm seeing more and more reasons that there is no need to be responsible for yourself, it's always up to someone else. I understand that we live in a society but there has to be some expectation of personal responsibility. at what point can government decide i don't NEED something for which i worked for and sacraficed in order to achieve?
Because if you live large now and save nothing you GUARANTEE you won't have much money during retirement. If you try and save you have a decent chance (not guaranteed) that you'll have some money.

If you ever want to retire and travel every year or two and buy presents for the grand kids let me assure you you won't be doing it on social security unless you have a supplemental income, no way no how.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
42,589
5
0
I work in mental health. Is it really a surprise that our country has so many severe problems with mental health issues when so many consistently blame people for not trying hard enough? We continue to feed into these myths that hard work equals success and that if you fail just try harder and you will succeed. I am absolutely unsurprised by the extreme acts of violence we have experienced over the past years - violence is one of the natural byproducts of creating tremendous feelings of powerlessness. It's the effect of a fundamentally unwell society and culture.

Eaglekeeper,
I'm going to pick on you a bit with this post but I'm doing so to make some broader points.

It's a very classist to state that that poor people choose to be that way. That is the myth of meritocracy - the belief that hard work equals success. It doesn't. Many people in this country work extremely hard and are unable to break out of poverty. For some, that poverty has lasted generations. Institutionalized and cultural racism, classism, ableism, sexism, heterosexism, ageism all create real barriers to financial success in this country. To say you could simply "choose" to overcome those obstacles is absurd. It takes extreme resiliency to overcome those barriers. Let's say you have none of these barriers - you are still faced with the reality that our society's entire economic system is driven by the idea of "winners" and "losers."

I find the "liberals are all about creating a dependent class by giving handouts" argument appalling. It implies that poor people are too stupid to recognize they are being duped. It's also contradictory to state that "most people choose to be poor" and then state it's all the fault of government hands outs. With the cultural and systemic barriers that exist in the United States today it is not surprising that most people simply give up hope and throw in the towel. Our culture fosters hopelessness.

As for how having retired people in poverty helps the wealthy that is fairly straightforward to explain. It is a classic tactic of those with privilege and power to turn those without it against each other. That prevents them from uniting and confronting their oppressors. In other words, facilitate a distraction from broader issues. If you want a specific example, look at the history books and the Voter suffrage movements - black men were systematically turned against women to delay women from having the right to vote.

It's a pretty simply recipe. Foster resentment among the lower classes to keep them sniping at each other, it's a very easy way to avoid getting caught in the crossfire. Add a nice cultural heap of bullshit that keeps everyone waiting for the day that they will "be rich." It adds a nice balance of small false hope - while ignoring the reality that it's hard to give a damn about broader issues when you are struggling to eat and shelter yourself every single day. Toss on a nice layer of fear for good measure about what might happen if things were to change.

I imagine it sounds like I'm talking about a conspiracy. I suppose in a way I am, but my real point is this: always question the broader narratives that exist in society. These messages are the root of our societal struggles. Some people may choose to be poor, simply because they never really had any other choice.

From one side it sounds like an excuse.

If even one person can bootstrap themselves out of poverty, there is no reason that a second or third can not.

It takes effort and determination.

Handing a person money to allow them to stay at the same level destroys the desire to move out of such an environment.

The bootstrap may have to be lucky to get to the wealthy status, but nothing stops them from trying. The effort can easily move them out if the poverty status.

Ex son in law was three generations of immigrant stock clerks at local grocery store. He decided that he wanted something better after meeting my daughter and myself. Went back to complete HS and got loan/grant to go to trade school (I would not allow ITT Tech :) ).
Got the training and makes 40+ as a computer tech. Bootstrap! Distant cousin is a gang banger in Miami, little brother is another quality car washer.

Both have GFs on welfare. Free money, Section 8 housing, no interest in advancement. Same as the mother.

Yet an aunt owns her house outside FLL free and clear now. Works as a nurse.

I know someone that had his wife get spinal surgery to collect SSDI. Now eligible for government handouts. She originally was head teller at a bank. Easier money this way.

Point is that many may feel that legal theft is justified, I have seen real world examples of what can be done, the positives and negatives.

Many people become dependant on handouts and desire to go no further.

And there are some from that life style that are able to break free.

While my ex-SIL may not make it past a tech, he has set an example.
He has shown what determination can do and hopefully will instill it to his kids to follow.

Each can cherry pick and pull stats out of their rear.
Go into Roxbury, Annacosta, Watts, etc and the evidence is there. Multiple generations on government support, no desire to break the dependant cycle. Professed, yes. But to put in the effort, nope.

A few can do so on their own. In the process. Getting derided by their friend and sometimes by the family.
 
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Charles Kozierok

Elite Member
May 14, 2012
6,762
1
0
Don't really have the time or energy to get into the larger issue, but I don't really understand the objection to the 401k restrictions. Nobody wants to limit how much you save, only how much you save that gets a tax deduction. That deduction is meant to ensure people have enough saved for retirement, so there's no reason for it to be unlimited.

That said, there's a solid argument that such a restriction isn't a really smart move anyway, because it gives the government less in tax revenue now than it would get in the future.
 

Craig234

Lifer
May 1, 2006
38,548
350
126
From one side it sounds like an excuse.

If even one person can bootstrap themselves out of poverty, there is no reason that a second or third can not.

Wrong, but a fallacy explaining your politics.

That's the problem - well, one of them - you use ideology and ignore the facts. What ACTUALLY results in less poverty in various policies globally?

It takes effort and determination.

First, those aren't enough.

Second, they help but aren't necessary. Quick, prove to me all the effort and determination the Wal-Mart heirs, now the richest family in the world, have to inherit their fortune.

Or Paris Hilton - except she actually does have some.

But hey, if one person can make ten billion dollars, then everyone can.

Handing a person money to allow them to stay at the same level destroys the desire to move out of such an environment.

No, leaving them homeless, sick and malnourished does that. There is a lot of incentive for them to make more - so they can afford all kinds of things more.

Both have GFs on welfare. Free money, Section 8 housing, no interest in advancement. Same as the mother.

Yet an aunt owns her house outside FLL free and clear now. Works as a nurse.

Better to have them as criminals - and then in jail at far greater expense.

I call shens on that aunt - OBVIOUSLY, in our society with all these incredibly overly generous welfare programs, she has no reason to be a nurse and own a house.

Things are completely broken! So it can't be true that it actually she works, she did not just get welfare.

I know someone that had his wife get spinal surgery to collect SSDI. Now eligible for government handouts. She originally was head teller at a bank. Easier money this way.

The US has the most restrictions on disability in the advanced world.

Some will try to scam. I'm in favor of legitimate efforts to catch and prevent that. Would YOU have back surgery like that? Most people would not.

There is going to be some amount of theft. Thing is, your solution is to punish all the people who legitimately need disability to deal with the few who steal.

I'm the one who would favor spending MORE on investigation and enforcement against fraud - would you, or are you the short-sighted 'budget cutter' who slashes enforcement?

There are no ideal answers, all policies have good and bad. But do you weight both or only one side? I only see one side in your post, and a lot left out.
 

Lithium381

Lifer
May 12, 2001
12,452
2
0
I find the "liberals are all about creating a dependent class by giving handouts" argument appalling. It implies that poor people are too stupid to recognize they are being duped. It's also contradictory to state that "most people choose to be poor" and then state it's all the fault of government hands outs. With the cultural and systemic barriers that exist in the United States today it is not surprising that most people simply give up hope and throw in the towel. Our culture fosters hopelessness.
Read 1984


I actually don't see an issue with putting a cap on tax advantaged accounts so long as that's understood from the get go. Now they're changing the rules. People who have invested could have and probably WOULD have put their money elsewhere had they known the cap was in place....
How can we trust that the government won't change the rules and just take ALL of our retirement money. Why would they take what i earn after having told me "don't worry, it'll be safe here"
 

DaveSimmons

Elite Member
Aug 12, 2001
40,730
670
126
People who have invested could have and probably WOULD have put their money elsewhere had they known the cap was in place....

"Survey Says: Men aged 25 to 54 admitted to having an average of $220,000 socked away for retirement."
http://www.forbes.com/sites/learnve...t-savings-how-do-you-compare-others-your-age/

So, with a cap of $3 - $3.5 million, most people are at 1/15 of the cap. Why would they give up the tax advantages of a trad IRA / 401k or Roth IRA if this won't affect them?

Where would they have put their money instead, given that they would pay taxes on both the original income and any growth?

The money that people already have in retirement accounts is exactly as tax-free as it is now. This cap limits how much extra they can add through growth and new contributions. The government takes nothing away from the existing money, and for 99%+ of citizens there is no change at all.

Edit: also, if you really can name a better investment idea given the cap, 99.99% of those saving for retirement could start using that idea now for their new contributions, and let their existing retirement accounts reach the cap through growth instead of new contributions. Under that scenario the cap has no real effect on their existing contributions.
 
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Mursilis

Diamond Member
Mar 11, 2001
7,756
11
81
Lithium, you repeatedly approach things with an ideological bias that distorts the issue.

Question: before Social Security, were the 90% of the people who were elderly and in poverty just irresponsible spendthrifts with no one to blame but themselves?

You've used that stat before, that 90% of the elderly lived in poverty before SS was created. Got a source? Wikipedia states that just over 50% lived in poverty at that time, which isn't great, but is less than 90%.
 

fskimospy

Elite Member
Mar 10, 2006
87,989
55,398
136
Read 1984

I actually don't see an issue with putting a cap on tax advantaged accounts so long as that's understood from the get go. Now they're changing the rules. People who have invested could have and probably WOULD have put their money elsewhere had they known the cap was in place....
How can we trust that the government won't change the rules and just take ALL of our retirement money. Why would they take what i earn after having told me "don't worry, it'll be safe here"

5th amendment.

While I agree that tax changes should not be retroactive, the idea that losing a tax break is a step to having your money confiscated is hyperbole.