Beware of Congress's Threat to Tax 401Ks

It's gettin better and better can you e-mail this artical to me thanks

If I read this right, this is Social Security II. I assume that taxing "5% of my pay" means a payroll tax like FICA. If I'm 55 and I make $100,000 a year, this means I'll be investing $5,000 a year for a $600/yr subsidy? So, in five years I've dumped $25,000 into this system. At $600/yr, it will take over 40 years to just get back what I put in! Holding a job becomes a losing proposition. The day this passes, I take early retirement even though I can't afford it. Then I'll be living on $25,000/yr, paying no taxes, and I'll be drawing food stamps and housing subsidies. Is this really going to make things better?

According to her website the rate of return paid would be 3% ABOVE THE INFLATION RATE. That's a big difference. I'm not sure if this plan makes any sense but at least we ought to get the facts straight.

Congress has lost its way and all of them need to be dismissed. 401K has always been a savings tool that benefited those that contributed, hoping that it would keep us off of public welfare at retirement. It seems like Dems want us all to be beholden to them for survival, and the Rep's just sit back and watch it happen. Taxing our 401K is another stupid idea from Congress.

At a time when our economy is crashing, layoffs on the rise and the financial arena virtually in ruins, Congress comes out with THIS! I've always felt that the Democrats were thieves and back stabbers. This proves it. Oh! one more thing. I fined it ironic that their platform in this election is promising to fix the problem. Well, they've had two years and many an opportunity to fix it. Instead, they fought against every proposal to regulate the banks. It gives one the impression that they orchestrated the whole thing to win an election. Just how dumb do they think we are? Beware the wolf bearing gifts.

“Beware of Congress’s Threat to Tax 401Ks” THANKS FOR A CLEAR AND CONCISE ARTICLE. Elizabeth MacDonald IS A JOY TO WATCH. SHE CUTS THRU THE BULL AND GETS TO THE MEAT. GREAT WATCHING HER, WISH SHE HAD A BLOG.

This insanity will not stop until we have changed the American political system to limit every elected official to a single, longer term of office, without possibility of re election in the same body of government. Thomas Jefferson was right. "If we allow service to government to be connected with personal enrichment, we shall see no end to its mischief and the only guard against this evil will be a limitation to a single term of service." The stupidity of taxing 401K accounts may seem unrelated to this issue, but I think it is in fact directly related. Only the political equivalent of in-breeding could produce so ill-conceived leaps of logic.

What the Lord giveth, the Lord taketh away. I thought my 401k couldn't be taxed until I withdraw the money. Just when you think you can play the game, the Dems want to change the rules. From Johnson, to Carter, to Lewinksy's boyfriend and possibly the most liberal, if "That One" gets in, who knows what will be left when I get to retirement age.

I believe the congress has the knowledge and the power to eliminate all 401Ks. They can use the 80 billion to pay down the debt, Why do we queations the experts from washington.After all we hired them to lead and advise us , and reelect them again when they fail. Seems like the choice is yours if you want them to kill the 401Ks .My advice to quit voting along party lines and elect the the person that give you the independance ,and supporting a 66000 page tax code that no one person has the knowledge of what is in it Seem to me we create our own problems,Then disagree with the outcome

Excuse me, 401K accounts are already taxed! I'm retired and every withdrawal from my 401K is taxed just as if I had just earned it. In addition, if a person want to make a withdrawal before they are 59.5 years old they pay an additonal 10% penalty. If congress wants to tax 401K's before they go in, then they should just scrap the concept and we'll all blow everything we earn and depend on the Government to support us in our old age.

This has to be one of the biggest untold stories of the year. Why is this not front page news? This would be a direct income tax hike on every one with a 401K, and ruin the financial retirement dreams of millions of Americans! It is no secret that the Democrats have always resisted 401k's, they were accidentally created by them as a benefit for large corporate wage earners, and President Reagan turned it into a means to fund individual retirement accounts for hourly workers, and small businessmen. The Democrats have tried to kill the program ever since. When Liberals talk about people in Kansas not voting their economic interest, I merely have to point out that since I work for a living, and pay taxes, my economic interest is that of the Republican party. Despite the number of people living on welfare in Kansas, we don't all have larger welfare payments as our only hope for economic improvement.

This is crazy!

I would like to remain anonymous. --------------------------------------------------------------------------------------- I would like Fox News to continue to raise the news item regarding the potential tax to 401ks that appears to be promoted by the Democrats. Please correct me if I am wrong, but didn't both candidates state that they would possibly eliminate the 10% tax on early withdrawal from 401Ks during these difficult financial times? My husband and I have seen a 40% reduction in our 401ks. My husband is retired and counts on his 401k to pay our monthly expenses. The less money that remains in his 401K, the less money is available for our health care, monthly mortgage, local business purchases (grocer, retail stores, pharmacy) etc. I am unemployed after leaving work in August to return to school because of the "cry" for nurses and nurse educators. This required an early withdrawal from my 401K in order to cover my expenses. I felt that my future contribution to my community warranted this personal expense. Two weeks prior to the Wall Street Bail Out, I realized that remaining in school was no longer prudent. I am seeking work again and will likely need to withdraw from my 401K in the interim. It seems the hits will keep on coming to those of us who started with nothing, worked hard, paid taxes and saved for the future. Thank you for continuing to cover this issue.

"The idea is to redirect 401K tax breaks to a new government system of guaranteed retirement accounts into which all US workers would be have to contribute." What about the social security tax that I'm paying now? I'm 26 now and I know I will never see that money again. Now they want to FORCE me to pay more to the same organization that has screwed up their previous retirement plan? I don't think so.

Just who is this "tootie frootie" Theresa Ghilarducci with the New School of Social Research who is advising Congress on HER plan to eliminate the preferential tax treatment of 401K plans? We didn't elect her to Congress, did we? How much money did Ms. Ghilarducci get paid to research how the government can screw up my 401K plan? Boy, the Democrats just don't get it -- advice from the New School of Social Research. I just hope she didn't suggest euthanizing everyone after the age of 65 or we are in big trouble in this country! M Abbott

You haven't seen panic yet. If this idea of shifting people's life savings into a goverment account ever gets legs. People panic when it comes to trusting the government with their future well being. It's my prediction the market will seize up. Does this coincide with the elimination of SS? People will want the money they've paid into it. This is not good.

i know people on welfare and they live better than me collecting over 25000 a year.i think i'm gonna go on welfare to. unless mccain wins there's no reason to work.

Elizabeth is wrong. A flock of geese have much more sense!

The basic concept of this proposal seems to be allowing for tax breaks in other saving vehicles besides the 401K. That is a legitimate arguement if the government allows $80 bln/yr with the goal of increasing the rate at which Americans save and that rate is not increasing the way they want it to. It doesn't make sense to spend $80 Bln on a new program if it is not delivering what was promised. Would you be against a reduction in the subsidy if you knew it would help out people who have savings plans other than 401K's? I do not have a 401K where I work so why should my portion of that $80 billion and all of the others who don't have 401K's subsidize those that do? This is that opposite side of that "socialism" coin. The vast magority of responses act as if everyone in America has a 401K and HOW DARE THE GOVERNMENT tax them. The fact is there a millions of hard working Americans that DO NOT have 401K's available to them and HOW DARE YOU demand that they subsidize YOUR investment vehicles. IF YOU ARE GOING TO SUBSIDIZE SAVINGS PLANS, SUBSIDIZE THEM ALL IN A WAY THAT THEY ARE ALL EQUAL IN THEIR RETURNS OR SUBSISIZE NONE!

This proves that the democrats are incredibly stupid or horribly malicious. I am going to take every penny I have invested in my IRA’s, 401K’s and other stocks out, place it in a zinc can and bury it in a remote national forest. That way I will feel like I’m giving money to the government but they won’t know where it is and I will still have access. Or! I could become a democrat and worm my way to elitehood with the rest of them. The great saviors of freedom who know better what to do with my income than I. As Steve Martin once said; “got fifteen hundred? Give it to me, I will put it in Steve’s bank. Right here in my pocket.”

Eric Friese is exactly right. Like I said in an earlier post, the only money you will EVER see is the $600 tax break. When you go to get your invested money out, there won't be any - just like social security.

People - please watch the Cavuto interview and see what George Miller is really saying. He has no plans to eliminate the tax breaks for 401(k) plans, regardless of what Ghilarducci is recommending. Don't believe everything (or should I saying anything) you hear on FOX without doing some research on your own. George Miller has been advocating for fee disclosure for 401(k) participants and trying to get more people saving for retirement. If this measure ever comes up before Congress, I would advise everyone to write to their senators/representatives and let them know it's a bad idea. A similar bill was attempted in the 80's and because of the number of letters written by concerned Americans, it went nowhere! Complaining on a blog doesn't help the cause - do something!

We were encouraged to put our money into these 401Ks. Now that there's a big pot of money there, the gov't wants it. Talk about double dealing. Wait for the next shoe - incentive stock options. I work for a small technology company where ALL the workers get ISOs. These ISOs help to compensate for the fact that small companies don't have the cash to pay market rates on compensation. The package is a competitive (but at the low end) salary plus ISOs to make up the difference. The thought being that when the company either goes public or gets bought, the employees that sacrificed compensation, get reimbursed with the gains on their ISOs. In many cases, to mitigate the risk, the ISOs aren't exercised until the event (IPO or buyout) is about to happen, thus making all the gain short term. With the new tax plan to be introduced this will be taxed at very high marginal tax rates. In effect, making them worthless and negating the sacrifice of many employees. This will kill ISOs for small technology companies, making it very difficult for them to get the talent needed. Talk about disincentive. I see no hope for anyone ever climbing the economic ladder. Do you think Bill Gates made his money on salary alone? Time for another Tea Party.

It all comes down to PR. By pandering to the left wing, disenfranchised, huddled masses, the Dems will now have the majority they need in Senate and House, plus White House, to pursue an aggressive change the world agenda. The strategy played out. "You're miserable, we know, we feel your pain and it's all because of all those rich white guys on Wall Street. But don't worry we're gonna get those guys with a big tax hit." These idiot hypocrites just don't realize they're about to kill the golden goose. They'll get theirs, but only when people realize they have no clue, and throw them out, leaving them with only one choice: a new party. This is why an Independent Party will sweep into prominence between now and 2012. Led by someone like Bloomberg. Andy Price Marin County, CA

There is an answer vote everyone of the creeps out of office as they come up for re election, spread the wealth, take our 401K's, bankruput the coal companies look out if you own property that will be distributed just to make everyone equal, does this sound like something from the past, possibly China? God help us all if Obama and his bunch is elected, the American people will have no one to blame but themselves for being so STUPID. The world is watching and waiting, the world is jelous of our freedom and our prosperity they can't wait for us to completely fail and Americans will make it happen by a vote, sad, and to think our dads and family members fought and died to keep the dream going. Maybe the country needs another revolution!