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) 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.” Thus do our political betters now feel free to define for everyone what is “needed” for a “reasonable” retirement.
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.!
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.
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. Congress wanted to encourage people to save, especially as it understood that Social Security and Medicare will become increasingly unaffordable.!
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. 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.”!