It appears, that House Democrats have also joined Obama in measuring curtains. The tax onslaught is beginning :
House Democrats contemplate abolishing 401(k) tax breaks
Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.
House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.
A plan by Teresa Ghilarducci, professor of economic-policy analysis at The New School for Social Research in New York, contains elements that are being considered. She testified last week before Mr. Miller’s Education and Labor Committee on her proposal.
Under Ms. Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5% of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3% a year, adjusted for inflation.
The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.
“I want to stop the federal subsidy of 401(k)s,” Ms. Ghilarducci said in an interview. “401(k)s can continue to exist, but they won’t have the benefit of the subsidy of the tax break.”
While Social Security is a safety net, 401Ks have been the primary vehicle for middle class retirement savings, and now the Democrats appear to believe that too is something that must be nationalized. A college professor deciding for us that not paying taxes on 401K contributions is a “federal subsidy”, and must be stopped ? Preposterous !
If the tax break goes away, so does employer matching of employee contributions. A very bad deal for middle class working families, and just one more example of how the Democrats want to “look out for” the middle class.
A premonition if I ever saw one, and this is just the tip of the iceberg.