|
|
<< SEIU Launches Blog | Main | Bush Promises $200 Billion Plus Deficits >> January 21, 2004Bush Savings Accounts- Theft from FutureFor pure intergenerational assault, it's hard to beat Bush's proposed expanded savings accounts. The idea is to build on the Roth IRA idea to create "Lifetime Savings Accounts" that would allow expanded tax-free distributions in the future. What's nasty about them (and Roth IRAs in general) is that they cost government today relatively little-- income earned today that's put into them is taxed normally, but FUTURE Congresses are theoretically barred from taxing accumulated wealth built up in them. The long term effects on the budget would be enormous: The Urban Institute-Brookings Tax Policy Center examined the proposal in last year’s budget and found it would grow sharply in cost over time, with the revenue loss ultimately reaching the equivalent of more than $50 billion a year. Over the next 75 years, the cost of the proposal would be equal to half of the long-term Social Security deficit.If they operate like Roth IRAs, and can be inherited by children, they will create a whole feudal class of rich people existing tax-free, even as workers income will inevitably have to be taxed more to make up the difference. Unfortunately, the 2001 law already plans to expand the Roth concept to the 401(k) pension system, so that danger will be partially realized, as I noted in this older column. In the long run, these tax-free savings accounts are possibly THE largest threat to economic equity in the tax code. They need to be fought with every progressive effort possible. Posted by Nathan at January 21, 2004 07:20 AM Related posts:
Trackback PingsTrackBack URL for this entry: CommentsWHat's the chance that we just screw over these Roth account holders in a couple of decades and tax their "tax free" accounts anyway? Posted by: Kevin Block-Schwenk at January 21, 2004 09:32 AM Yes, people saving their earnings and having them taxed only once, while prohibiting the government from dipping again into the pot over and over, boy, that has gut to be stopped. This goes right with my proposal to club people who pick up pennies found in the street. Good job Nate. Maybe we could cage them in factory farms like veal and then tax them for the crate. Posted by: Dominick at January 21, 2004 01:00 PM Dominick-- You must study with Grover Norquist-- estate tax is like the Holocaust type rhetoric. All money gets taxed repeatedly. For workers, the same dollar gets taxes for income tax and social security, then gets taxed for sales taxes. It's only the wealthy who whine and cry because they have to pay additional taxes on additional interest and capital gains income on investments. The rightwing ideal is a world where the working poor have heavy direct taxes while the wealthy live tax-free off their investments. And as workers slave in real sweatshops-- often caged as Wal-Mart does overnight-- the rich whine about metaphoric cages because they can't afford their third beach house. Sad, sick and greedy. Posted by: Nathan Newman at January 21, 2004 01:33 PM To expand on Nathan's response: Dominick, the Roth IRA gains are NEVER taxed by the government -- not multiple times, not twice, not ever. So if you can afford to put away up to $2000 in net income a year in a savings account (which many can't), it will earn interest or otherwise make money that IRS can't touch. One aside for a minute. If the federal government raised taxes on average 8-10% per year for a program that didn't improve, and wasn't that satisfactory to begin with, the right wing would call for an lynch mob to get the bureaucrats. When the for-profit health insurance industry does this, as it has over the last decade, the right wing shrugs its shoulders, talks about the wonders of the free market, and votes to give the industry billions of your tax dollars. I might add that the public officials who run ERISA make a fraction of what the suits running AETNA et. al. make. Where is the outrage on behalf of the working stiff from the right wing when companies screw us over and get rewarded with our tax money? Why can't they admit that the invisible hand is flipping most of us off? Posted by: Nick at January 21, 2004 05:29 PM Post a comment
|
Series-
Social Security
Past Series
Current Weblog
January 04, 2005 January 03, 2005 January 02, 2005 January 01, 2005 ... and Why That's a Good Thing - Judge Richard Posner is guest blogging at Leiter Reports and has a post on why morality has to influence politics... MORE... December 31, 2004 December 30, 2004 December 29, 2004 December 28, 2004 December 24, 2004 December 22, 2004 December 21, 2004 December 20, 2004 December 18, 2004 December 17, 2004 December 16, 2004
Referrers to site
|