Powell Endorses Obama

What is more likely, is the "onetime" 10-20% tax on all 401K adn IRA accounts. That will allow the Social Security system to extent its bankruptcy another decade or so.

I think this is a great idea. After all the only reason people are able to build up substantial 401K accounts is that they made more money then everybody else. Therefore it is only fair to "spread this wealth around" to the less fortunate.

 

Or people like me, who make the same $ as everybody else despite working 50-60 hour weeks, but live in modest housing, don't spend much as discretionary income, and use 90% of it to pay off student loans or bank it.

I'm going to have a fairly large 401(k) that hopefully will mean financial independence for the future. I make an EITs salary and have massive student loans, but live well within my means.

and you're gonna take 20% of my well-earned savings and give it to people who blew theirs living high on the hog? Oh, HELL NO.

 

It is only fair that people who make more should be happy to help others. As Barry has said, you are "selfish" if you don't want to help.

It is going to be a great 4 or 8 years, isn't it.

 

Social Security is in great shape. According to the CBO, SS will continue running surpluses until 2052, at which point it will start running small deficits.........deficits much smaller than the general revenue deficits that exist today.

Obama's proposal to flat tax everyone at 7.65% instead of regressively taxing just those making $100k or less will push SS surpluses into the 22nd century and beyond.

SS will not go "bankrupt". That's a word that applies only to corporations.

Because of rising health costs, Medicare faces a difficult near future. But SS is fine financially. So need for any mythical IRA tax.

 

Here is an article that says it will be deleted by 2040. which means something has to be done way before that. I think Obama's plan to spread the wealth would apply perfectly here. For all the people who have saved dilligently in there 401K's, us people who didn't say thank you for your hard work.

Maybe it should be a 25% tax on 401K's, then we will thank you even more.

Remember if you don't agree, you are selfish. Go Obama.

 

Here is another more recent article that says by 2017 SS starts to pay out more then it takes in.

http://www.washingtonpost.com/wp-dyn/content/article/2007/04/23/AR2007042301963.html

SS is in deep trouble.

On a more serious note, if all you have substantial 401K accounts, you should seriously think about sheltering that money somewhere else, because Barry is going after it.

Unless you want to be on the giving end of "spread the wealth" take precautions now.

The rational is that those are retirement accounts and are subject to tax deferment. Barry's argument is that lets get the tax deferment now and not wait until later. Just watch and see what happens. Change is coming.

 

bestmapman,

There's a big debate between the CBO & SS Trustees re: expected future economic growth, which explains the difference between 2040 & 2052. Let's split the difference.

You say that means something has to be done way before that. You could not be more wrong. In fact, we have a moral obligation to do nothing.

For one, the problem may never emerge. Higher than expected growth could push that date off further into the future. But we'll assume that around 2040-2052 SS does in fact go into deficit.

How to correct that deficit? Tax hikes? SS benefit cuts? A combination of both? It is not for you or me to decide. Why? Because we are both dead.

Our sons & grandsons will hopefully be alive at that time. And we have no idea what they prefer. And you better believe it will affect their generation and not ours at all.

Tax hikes, benefit cuts, or a combination of both can have an immediate effect in 2046. So let them decide. They may not have to decide at all, but if they do.............they'll be glad you didn't bogart their choices.

 

bestmapman,

The 2017 date is irrelevant. The 2040/2052 dates are all that matters.

Back in 1982, Reagan began to worry about 2017. So he agreed to increase FICA in order to build up a trust fund that would extend the life of the SS surplus to 2040/2052. Now SS holds securities that allow for an extra 25-30 years of surpluses.

And if they disappear in 2040/2052? Our kids & grandkids can & should decide what to do, since it affects them and since they certainly can without injury.

Now if you don't like SS and want to eliminate it, that's fine. Just say that.

 

I plan to never use any of the SS money I have paid in. It may be there it may not, but I aggressively save for the future for my family. 401K (only put in the amount that gets me my employer match, Roth IRA (15% of my family income) been doing that for 10 yrs now.

Now if any president starts messing with IRA's and 401k I think that would cost them a re-election. I certainly wouldn't vote for them.

 

Quote from http://www.washingtonpost.com/wp-dyn/content/article/2007/04/23/AR2007042301963.html

"By 2017, Social Security will pay out more in benefits than it collects in taxes, the trustees said in their annual report. "

I think that is pretty relevant. Also, are you really saying that we shouldn't fix it now when it is easier to fix and wait for later when it is in far harder to fix.

 

Maybe we should start a new thread, because we are way off btopic.

The idea of taxing 401k's is not new. Bubba was trying to do it in the 90's Here is one of several links.

Hey I like the idea, all of you that have substantial 401k's, change is coming. The country is voting that way, so you better get ready for change.

 

Reagan ensured it is not. The trust fund will ensure surpluses after 2017 for another 25-30 years.

It's not harder to fix later. A small deficit is a small deficit. You can raise taxes and/or cut SS benefits by 10% now, or raise/cut by 10% later. Ask your grandkids which they prefer and then go for it!

 

I have a tendency to do that. I read these political threads for fun, and really stay away from those expressing opinion, since that's never wrong.

But then I'll read a little something someone wrote that might not even be a main point, but I'll enjoy an attempt to clarify.

 

My prediction is that part of the change coming is a "one-time" tax on 401k accounts. It's not my idea, but hea, it looks like we are voting for change, so hold onto your walletrs if yoy can.

 

Do you have any references for your position. I know you are stating these things, but I don't see anything that you have shown to support your position. What I have quoted is diferent then you state.

 

???? 401k's are tax deferred. That is the whole idea behind the "onetime tax". The thinking is the the country can't afford to have tax deferred accounts anymore, so they will have to do away with 401k's. Hence exixting 401k's get a onetime tax.

It's not my idea here is a link. The dems are talking about it just last week.


Of course everyone knows that if done it won't be a onetime tax if instituted.
Change is coming, I hope we like it.

 

http://www.tcf.org/list.asp?type=NC&pubid=928
http://www.csmonitor.com/2005/0127/p09s01-coop.html
http://workinglife.typepad.com/daily_blog/2005/01/ronald_reagan_s.html

If I fail to support anything, you can rest assured it is simply because I'm real lazy.

What you have quoted is not different. It's actually accurate. But it's really only a small part of the story, and leaves out a significant part.

Saying SS benefits will exceed SS revenue in 2017 without mentioning the trust fund is a bit like saying my expenditures at retirement will exceed my salary without mentioning my IRA nest egg.

 

I'm find it quite amusing that my conservative friends continue to call for a "fix" for Social Security.

Let's be clear about the debate. Liberals like SS because it is an insurance program as much as a retirement vehicle. Everyone participates, and everyone is guaranteed a defined benefit. Conservatives don't like SS because it infringes upon economic freedom. One should be able to provide for one's own retirement without government interference..........let me invest my 7.65% as I wish in a defined contribution plan of my own control.

That's a fair, honest debate.

The problem for conservatives has been that SS remains very popular.....and it is hard to reduce/eliminate popular ideas. So the way around that was to create a crisis. So Bush in 2005 tried to convince the public that SS was in urgent need of a fix, and his private accounts solution was the answer. If "I don't like it and I'm gonna get rid of it" is a loser, maybe "It's in trouble and I'm gonna reform it the conservative way" might not be.

The problem was that liberals didn't budge. They stated the facts...........that SS benefits were paid up for 40-45 years, and that any action needed could be addressed by future generations at that time. The "there is no crisis" position, combined with the popularity of SS, doomed Bush.

Now, it just so happens that some liberals want to "shore up" the fiscal situation of SS to ensure sufficient funds for 100 years instead of 40-45, and the preferred method is by flattening the payroll tax to all wages, not just those under $100k. This is Obama's plan, and he's likely to get it with a Dem Congress.

And so, I sincerely suggest to my conservative friends that they drop this talk about Social Security needing emergency attention. Not only is it wrong, but it enables Obama & Dems to "fix" that problem via the flat FICA. If he succeeds, then when conservatives are in power they will REALLY have a hard time selling the public on a need to fix SS. It will be paid up until 2100.

So when conservatives call for a SS fix, they are enabling Obama's solution to a large degree. Best just to say "no need to do anything". Not only do you fight a tax increase, but........as Kissinger famously said.............."it has the added advantage of actually being true."

 

I had a different take on the article you linked. The proposal to "nationalize 401K's" that was discussed sounds DOA to me. When press secretaries say "This [plan] certainly is intriguing" I think they usually mean "that sounds like crazy talk that my boss didn't think was important enough to discuss with me." Maybe the website in question advocates a particular political point of view? Did your speculation about the one time tax idea came from somewhere else?

The way Debts and Deficits have grown over the past eight years our 401K's taxes are being deferred into an era that likely will have higher tax rates. It's a bait and switch deal that apparently few middle class savers noticed. I haven't crunched the numbers, but over time tax revenue from 401K redemptions should balance the tax deferrals. To me, ending the 401k tax deferral would be analogous to choosing government debt over current taxes--once you look at cash flow both imply higher future tax rates.