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Thread: White House budget proposal caps retirement savings accounts

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    Default White House budget proposal caps retirement savings accounts

    I'm open to hearing from people why they believe this is a good proposal from the White House because right now I don't see it.


    Now He's After Your 401(k)

    The White House pulls a switcheroo on retirement savings accounts.


    How many times have you read financial-advice stories lecturing you to max-out on your IRA, save as much as you can in your 401(k), and even pay taxes now to change your regular IRA into a Roth IRA that will be tax-free until you die?

    Well, be careful how much you save.

    That's the message in President Obama's budget for fiscal 2014, which for the first time proposes to cap the amount Americans can save in these tax-sheltered investment vehicles. The White House explanation is that some people have accumulated "substantially more than is needed to fund reasonable levels of retirement saving." So Mr. Obama proposes to "limit an individual's total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per year in retirement, or about $3 million for someone retiring in 2013."

    Thus do our political betters now feel free to define for everyone what is "needed" for a "reasonable" retirement. Not to be impertinent, but does this White House definition include being able to afford summers at age 70 at Martha's Vineyard near the Obamas?

    The feds may think $3 million is all you need after a lifetime of work, but that's roughly the value of a California police sergeant's pension if she works for 30 years, retires at age 50 and lives to normal life expectancy.

    Out in the private economy, people generally have to work longer than that before they retire, and some of them do manage to save significant amounts. We're talking about people who work for decades and abstain from buying the bigger house or the new car so they can contribute the maximum to their 401(k)s or IRAs. The people who defer gratification and build a nest egg to avoid becoming a burden on their kids or their fellow taxpayers. The people whose savings finance productive enterprise. You know, the bad guys.

    Best-selling books used to celebrate these "millionaires next door" who worked and saved their way to financial independence. But now Mr. Obama wants to treat them as if they all got rich by sheltering investments in the Cayman Islands or extracting bonuses from bailed-out banks or scooping up sweetheart mortgage deals from allegedly nonprofit universities. Someone should tell the President that most Americans can't swing the bonuses that his Treasury Secretary Jack Lew arranged at NYU and Citigroup C -0.20% .

    The budget offers few details on how the government would enforce this cap across a worker's various accounts, but you can bet it would be complicated. Right now the government doesn't track all tax-deferred account balances. Financial firms don't have to send IRS 1099 forms to investors unless there's a distribution, nor do the firms know how much customers hold at other institutions.

    So the IRS would get new power to impose new burdens on millions of taxpayers. And all so the government could raise what the White House claims would be $9 billion more in revenue over 10 years, as if people wouldn't change their savings habits. After this proposal, only a fool would pay taxes now to transfer to a "tax-free" Roth IRA that the feds may decide to tax someday.

    The Occupy Wall Street crowd will be cheering this ideological assault, but the occupiers who mature into productive citizens will someday find themselves in the cross-hairs. The cost of a $205,000 annuity changes over time and inflation will reduce its value. The Employee Benefits Research Institute points out that such an annuity stream could be had for as little as $2.2 million, not $3 million, within the last several years. As a result, EBRI estimates that under such a scenario as much as 6% of today's younger workers age 26-35 could end up hitting the cap.

    Liberals say tax-advantaged plans are unfair because the affluent benefit more than the poor. It's true that you can save more when you earn more, but the savings are also channeled into productive investment and they are eventually taxed when they're withdrawn. Congress wanted to encourage people to save, especially as it understood that Social Security and Medicare will become increasingly unaffordable.

    The Treasury Department says its proposal would still allow existing accounts to continue to grow tax-free until distributions occur, but it would prevent new contributions once a saver hits the cap. We'd be happy to support a reduction in these tax incentives as part of a tax reform that reduced tax rates. But until that happens, these tax incentives are ways that thrifty Americans can shelter savings from punitive tax rates.

    The Administration's political motive here is two-fold: First, it's a redistributionist play and a revenue grab. But for many on the left it's also about reducing the ability of individuals to make themselves independent of the state. They have always disliked IRAs, just as they oppose health-savings accounts, because over time they make Americans less dependent on federal entitlements or transfer payments.

    Amazingly, Mr. Obama has surveyed the economic landscape and somehow decided that it's time to discourage savings if you make more than he thinks is "reasonable."


    http://online.wsj.com/article/SB1000...88381481237582

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    Fuck them. That's my god damned money. I was just saying I hope a comet strikes the White House. Now I hope it's 1,000 comets.
    WATERMARK, GREATEST OF THE TRINITY, ON CHIK-FIL-A
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    Obama and his pinhead followers know how much you need for retirement....not you......

    He'll put a cap on what you can save for retirement.....................its fucking astounding how stupid the pinhead Democrats are ......
    Put blame where it belongs
    ATF decided it could not regulate bump stocks during the Obama administration.
    It that time," the NRA wrote in a statement. "The NRA believes that devices designed to allow semiautomatic rifles to function like fully-automatic rifles should be subject to additional regulations."
    The ATF and Obama admin. ignored the NRA recommendations.


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    Obama has proven more than once that he is little more than a corporate lackey, a grave disapointment.
    This is not surprising in any way.
    My friend told me yesterday" The system is so corrupt, so complete, so invasive , that the revolution can go on without me. I am saving my bullets for food"

    Probably some old biker or hippy quote, but it was new to me.
    It is the responsibility of every American citizen to own a modern military rifle.

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    why doesnt that article say who wrote it?

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    Default White House budget proposal caps retirement savings accounts

    Obama is only going after the evil rich

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    I cant even check the reputation of the writer to make sure its someone who gives the facts straight.

    You people will BUY anything

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    Default White House budget proposal caps retirement savings accounts

    Quote Originally Posted by evince View Post
    I cant even check the reputation of the writer to make sure its someone who gives the facts straight.

    You people will BUY anything
    You won't believe it anyway so stop yer bitchin

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    Quote Originally Posted by evince View Post
    why doesnt that article say who wrote it?
    Really? It's an op-ed from the Journal. Every paper has op-ed's written by the editorial board that are unnamed.

  10. The Following User Says Thank You to cawacko For This Post:

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    Quote Originally Posted by evince View Post
    why doesnt that article say who wrote it?
    Who the hell cares who wrote....its been on the news and talked about for a week already....at least normal news, not lamestream msnbc
    Put blame where it belongs
    ATF decided it could not regulate bump stocks during the Obama administration.
    It that time," the NRA wrote in a statement. "The NRA believes that devices designed to allow semiautomatic rifles to function like fully-automatic rifles should be subject to additional regulations."
    The ATF and Obama admin. ignored the NRA recommendations.


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    Quote Originally Posted by evince View Post
    I cant even check the reputation of the writer to make sure its someone who gives the facts straight.

    You people will BUY anything
    It was on Fox so you can take it to the bank.
    Put blame where it belongs
    ATF decided it could not regulate bump stocks during the Obama administration.
    It that time," the NRA wrote in a statement. "The NRA believes that devices designed to allow semiautomatic rifles to function like fully-automatic rifles should be subject to additional regulations."
    The ATF and Obama admin. ignored the NRA recommendations.


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