OBAMA PLANS TO KILL 401K TAX BREAKS

OPERATION EXPOSE: OBAMA AIMS TO KILL 401(k) TAX BREAKS (Trafalgar)

In a possible preview of economic policy under an Obama Administration, powerful House Democrats are looking at eliminating most of the $80 billion in annual tax breaks for 401(k) investors.  Workforce Management reports that Rep. Jim McDermott, D-Washington, Chairman of the House Ways and Means Committee's Subcommittee on Income Security and Family Support, and House Education and Labor Committee Chairman George Miller, D-California, are studying how to alter the nation's $3 trillion 401(k) system, to eliminate investor tax breaks and force workers' money into obligatory retirement accounts.

Blogger Ed Morrissey notes "that means your employer can no longer write off their contributions to your 401(k), and your capital gains would be taxable year to year.  In other words, it becomes just another investment or savings account, with no tax benefit at all, and no employer contribution."

This huge disruption of Americans' retirement plans may be only one element of an Obama Administration's tax hike on workers. The Wall Street Journal notes that "the prospect of these tax increases is now hanging over the economy like a pall, as investors and businesses wonder where and how heavily an Obama Administration and Congress would strike."

For more information go here and here.

UPDATE: Cautionary Take of Obamists

ARGENTINA'S PROPERTY GRAB WSJ hat tip Steve

Argentine President Cristina Kirchner announced this week that her government intends to nationalize the country's private pension system. If Congress approves this property grab, $30 billion in individually held retirement accounts -- think 401(k)s -- managed by private pension funds will become government property.

That the state could seize retirement savings no doubt seems outrageous to Americans. But it is a predictable development in a country where government intervention in the financial system is the norm. With Washington now expanding its role as guarantor in American banking, that's something to think about.

Mrs. Kirchner won't have trouble making the case for expropriation to Congress, which is controlled by her fellow Peronists. When the Argentine government ran out of money in 2001, it blamed the market and increased its own role in the economy. Since then it has imposed price controls, defaulted on its debt, seized dollar bank accounts, devalued the currency, nationalized businesses and tried to set confiscatory tax rates with the aim of making society more "fair." Mrs. Kirchner and her predecessor (and husband) Nestór Kirchner have also preserved the Peronist tradition of big spending.

All of this has been deemed acceptable because of the "crisis." But it has come at a cost: Among emerging market investors Argentina is now considered one of the worst places on the planet to put your money.

 

 

Comments

[TINBH]

In Obamatopia - there will be no need to save for one's retirement - the "village" will take care of all.

[Dustin May]

This is serious stuff. I saw this yesterday, flew off the handle, had a moment of clarity and wrote this...

Socialism to Dictatorship - http://o2richenvironment.blogspot.com/2008/10/socialism-to-dictatorship.html

With all the power grabs going on by the government and citizens standing by and accepting it and a potential president who has already shown a lack of respect for the Constitution I don't think the premise is that far off.