The Campaign Spot

The Coming Democratic War on 401(k)s

As noted in the post linked below, you are now starting to hear Democrats talk about eliminating the tax deductability of 401(k)s.

James Pethokoukis:

House Democrats recently invited Teresa Ghilarducci, a professor at the New School of Social Research, to testify before a subcommittee on her idea to eliminate the preferential tax treatment of the popular retirement plans. In place of 401(k) plans, she would have workers transfer their dough into government-created “guaranteed retirement accounts” for every worker. The government would deposit $600 (inflation indexed) every year into the GRAs. Each worker would also have to save 5 percent of pay into the accounts, to which the government would pay a measly 3 percent return. Rep. Jim McDermott, a Democrat from Washington and chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, said that since “the savings rate isn’t going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that’s not generating what we now say it should.”

Best of the Web has more. In exchange for $600 from Uncle Sam, you agree to give 5 percent of your income to them each year, which they will increase at 3 percent per year. You die, the government gets half. Some deal.

Earlier today Rush Limbaugh spotlighted this comment by Joe Biden on the stump:

Biden took direct aim at executives who draw big salaries while leading failed companies where employees are losing pensions. “Their pensions go first,” he told a roaring crowd.

If those CEO’s pensions “go” — i.e., are confiscated, as Argentina is currently doing — who goes second? Third?

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