If you think your retirement accounts (401Ks, pensions, IRAs) look bad now, just wait until the New Socialist Democrat Party gets hold of them!
Democrats in the U.S. House of Reprobates have been conducting hearings on proposals to confiscate worker's personal retirement accounts and convert them to accounts managed by the Social Security System. This is the same system that is at risk of bankruptcy due to the systematic looting (management) of our funds by 'pork' hungry congressional criminals (of both parties) for years.
The testimony of Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, in hearings Oct. 7 drew the most attention and criticism. Testifying for the House Committee on Education and Labor, Ghilarducci proposed that the government eliminate tax breaks for 401(k) and similar retirement accounts, such as IRAs, and confiscate workers’ retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration.
Rep. George Miller, D-Calif., chairman of the House Committee on Education and Labor, in prepared remarks for the hearing on “The Impact of the Financial Crisis on Workers’ Retirement Security,” blamed Wall Street for the financial crisis and said his committee will “strengthen and protect Americans’ 401(k)s, pensions, and other retirement plans” and the “Democratic Congress will continue to conduct this much-needed oversight on behalf of the American people.”
Currently, 401(k) plans allow Americans to invest pretax money and their employers match up to a defined percentage, which not only increases workers’ retirement savings but also reduces their annual income tax. The balances are fully inheritable, subject to income tax, meaning workers pass on their wealth to their heirs, unlike Social Security. Even when they leave an employer and go to one that doesn’t offer a 401(k) or pension, workers can transfer their balances to a qualified IRA.
These hearings were triggered by the financial crisis of the past two months; a crisis in which the socialist leaning Democrats see opportunity to further erode individual freedom and make the populace more and more dependent on Government (them) for their every need. Already they have succeeded in creating multiple generations that have never worked and now have designs on your your retirement money to guarantee that this non-working class never has to!
The proposed Guaranteed Retirement Accounts (GRAs) would guarantee a fixed 3 percent annual rate of return, although later in her article Ghilarducci explained that participants would not “earn a 3% real return in perpetuity.” In place of tax breaks workers now receive for contributions and thus a lower tax rate, workers would receive $600 annually from the government, inflation-adjusted. For low-income workers whose annual contributions are less than $600, the government would deposit whatever amount it would take to equal the minimum $600 for all participants. Now folks, I am no 'rocket surgeon', but just how do you think you are to retire on $600 per year. Don't spend it in one place!
In a radio interview with Kirby Wilbur in Seattle on Oct. 27, 2008, Ghilarducci explained that her proposal doesn’t eliminate the tax breaks, rather, “I’m just rearranging the tax breaks that are available now for 401(k)s and spreading — spreading the wealth.” (Where have I heard that before?)
All workers would have 5 percent of their annual pay deducted (confiscated) from their paychecks and deposited to the GRA. They would still be paying Social Security and Medicare taxes, as would the employers. The GRA contribution would be shared equally by the worker and the employee. Employers no longer would be able to write off their contributions. Any capital gains would be taxable year-on-year.
Analysts point to another disturbing part of the plan. With a GRA, workers could bequeath only half of their account balances to their heirs, unlike full balances from existing 401(k) and IRA accounts. For workers who die after retiring, they could bequeath just their own contributions plus the interest but minus any benefits received and minus the employer contributions.
Folks, it has started already. The Democrats and their socialist idealists have been emboldened by the election results. They see this as an opportunity to increase their power over your lives and they will try to take it.
They will overreach and we must hold them accountable.
GMWinslow
The Tennessee Conservative
