Is this proposing confiscation of individual 401ks to fund social security?

[dkf]

Instead of expanding failed private savings programs while cutting Social Security, why don’t we cut private savings programs and expand Social Security? Why don’t we downsize unjust and inefficient programs that shelter the private retirement savings of the rich and affluent from taxation, while boosting benefits paid through the fair and efficient Social Security system?

http://www.salon.com/2013/04/04/abolish_the_401k/?source=newsletter

How else do you get individual 401ks $ which is voluntary into social security?

[el_bryanto]

1. I don't know- I have a 401k - I'm not really affluent - Comfortable I guess.

Is that what it sounds like - take my 401K and place it in the Social Security general fund?

Bryant

[Enrique]

2. no, it's a good article on the issue of retirement finances n/t

[unblock]

3. no. why on earth would you think that???

abolishing the tax provisions for future contributions to 401(k)s in no way says anything about confiscating past contributions to 401(k)s.

the idea that this proposal is about confiscation is even more hyperbolic and paranoid than the notion that reasonable gun regulation is all about confiscation.

[dkf]

4. So how do you expand SS by changing 401ks?

What is the proposal behind this paragraph?

And I think that because I've seen what happened in Ireland and Argentina.

[unblock]

7. i think the idea is simply

that if the government isn't subsidizing 401(k)s it is in a better position to subsidize social security.

personally, i find 401(k)s problematic. first, many plans suck away a large portion of the tax benefits in fees.
second, participation is much easier for the upper-middle class than those less fortunate, and it's a silly freebie for the rich.

[dkf]

8. Since there isn't a connection between SS and the Federal Budget or so they say, why would

they subsidize SS? Wouldn't that blow the entire argument regarding the deficit to smithereens? I still don't see how that works.

Maybe it's the rhetoric on "unjust" 401ks that makes me suspicious.

[Benton D Struckcheon]

9. Personal experience with affording a 401k

I couldn't really afford to fund mine until we bought a house. The tax savings from the house allowed me to afford maxing out the 401k, which of course wound up making my tax bill go down even more.
I was making a very nice salary at the time. I realized then, and I still realize now, that the only people who benefit from 401k's are people who have a lot of money in the first place. Mostly that's either childless people or people who keep it down to maximum two kids AND are making very nice salaries. Anyone else who's not really really rich in the first place is not going to be able to use it much if at all. If you have a lot of kids you have all kinds of other expenses you have to save for and worry about. If you're poor it does you no good. So the lost taxes are going to subsidize upper income people.
That's what the article is actually addressing.
Also, if you really want to know who benefits, look up the limits on SEP-IRAs:

The total contribution to a SEP-IRA account should not exceed the lesser of 25% of income (20% for self-employed before self-employed tax deduction is included; see below) or $42,000 for 2005, $44,000 for 2006, $45,000 for 2007; $46,000 for 2008; $49,000 for 2009. For 2010 and 2011, the maximum SEP IRA contribution remains at $49,000 and the compensation used in the calculation is capped at $245,000 (e.g., an employer making a 10% contribution cannot contribute more than $24,500 for any employee). For 2012 the maximum contribution is $50,000. Contributions may be made to the plan up until the date that the employer's return is due for that year.

This is why the opposition to the repeal of the Bush tax cuts was so utterly dishonest. Anyone making 250k would NOT have been paying anything like the maximum rate had they been repealed for the 250k+ set. In order to begin to pay that you would have had to have 250k in TAXABLE income. For anyone making that kind of money, their actual income is a lot higher than their taxable income because of things like the 401k/IRA/SEP-IRA deductions, which are actually adjustments to gross income. In other words, before you figure out anything else these are taken right off your income because the logic is you will collect it on retirement. So you could make close to 300k and have AGI of only 250k, and then start taking your deductions from that amount. By the time you're done you pay tax on, say, 175k and so the expiry of the Bush tax cuts, had that been applied to people making more than 250k, still would not touch you.
Makes me pissed just typing that.

[unblock]

11. Yes, it is a bit indirect.

Social security is indeed self-funded, so federal budget savings don't directly pertain to the social security budget. However, if the 401(k) tax breaks were abolished, more people would look to social security to find their retirement, which would lead to a demand for better social security benefits.

In fact, it probably would have to be done as a package deal.

[liberal N proud]

5. They will never abolish the 401Ks because it is a perfect scheme for Wall Street

It is a way for them to use our money to gamble in the market and we are the ones who will lose when the market tanks.

They are not going to ruin a great scheme like that.

[Bluenorthwest]

6. Did you even read the article? Because it says no such thing, not even close.

nt

[dawg]

10. Not a well thought-out article, but ...

something different needs to be done. Surely to God no one but the most extreme socialist would be in favor of confiscating anyone's balance. I think they are thinking more along the lines of the extra income tax revenues that would be generated if the contributions of the rich were no longer sheltered from the income tax.