More Big Government for Hillary, 401Ks run by the Government and Tax Credits for all
October 09, 2007 04:35 PM EDT
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Hillary has decided that government run healthcare is not enough; she now wants to have a government run 401k system. Today she laid out a plan for a government run 401K plan with what she calls "American Retirement Accounts." She also calls for a tax credit of $500 or $1000 to encourage people to save, and she will pay for it by freezing the estate tax. She will make these accounts voluntary. Hillary maybe has spent too many years out of the mainstream of America. Portable retirement funds are available everywhere, you can even sign up for one online in three minutes. We already have tax incentives to save in these accounts. What Hillary now wants to do is to take away the free market from Investments. She could propose to change the tax code without having a government takeover of retirement accounts. What is wrong with T Rowe Price or Vanguard. Hillary makes it clear with this proposal that she has never me a government bureaucracy that she does not like. Let’s take something the free market already offers and have the government run it. Either she does not understand the Constitution or finds it inconvenient. It is time that people stand up to Big Government advocates and make them respect the free market and the Constitution of the United States of America. http://firstread.msnbc.msn.com/archive/2007/10/09/403792.aspx
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Comments: 64
From what I've read in your link, it's a choice, not a requirement, if you like T. Rowe Price or whatever, you can keep your fund there or you can enroll in the government plan. That point seems to be omitted from your article.
I agree with you on Social Security, it was supposed to be optional and you see what happened.
Stacey-
Like I said the Joseph Social Security was optional at first too. Government should not be running things that are freely avaliable. It is a federal power grab. Government does not run programs very efficently shouldnt we improve the way Government operates current programs before giving them more to run.
There are many people with jobs that do not offer 401(k) plans - that is usually a benefit given by larger companies to higher-paid salaried employees. To speak out against this kind of a plan being offered to lower income, hourly employees with low or no fees seems absolutely un-American.
And, MDP - I know whereof I speak. My husband and I own an investment company offering individual, corporate and municipal retirement investment portfolios. We deal with accounts $100k and higher. There are not too many options for lower income people, especially in the 401(k) area. It's definitely a case of "the more you earn, the more you make". Most professional people I know who work for larger companies get some pretty nice savings matching from those companies. I don't think MIckie D's does that for their counter help. Why shouldn't those people be able to benefit from a 401(k) type investment vehicle?
In fact, it is just another type of account that Vanguard, Bank of America and everyone else will offer. And, it will have restrictions and benefits set out, just like our 401(k)'s, 529's, etc.
Your entire premise is incorrect.
Here's a quote from her media release: "Offer secure, diversified investment options: Individuals will have the choice to set-up their accounts with any private provider that offers diversified investment options and that includes as a default option, a passively managed lifecycle-type fund." http://www.hillaryclinton.com/news/release/view/?id=3632
"Those who like their current retirement savings accounts can keep them —the only change is that they may be eligible for generous new matching tax credits."
"New Choices Without New Bureaucracy: American Retirement Accounts will be established without any new government bureaucracy, by creating competition in the private sector to provide plans that are both secure and marketable. Individuals will get to choose how they want to set up their American Retirement Accounts. They can set them up with private providers who offer diversified investment options with a default passively managed lifecycle-type option and low administrative costs. Or they will have an option of opening an American Retirement Account through a publicly managed clearinghouse similar to the Thrift Savings Plan which Members of Congress can currently utilize. Investments in the accounts opened through this public clearinghouse would be held and managed by private financial institutions, who to the greatest extent possible would manage administrative and transactional support."
Directly from her plan
"Or they will have an option of opening an American Retirement Account through a publicly managed clearinghouse similar to the Thrift Savings Plan which Members of Congress can currently utilize. Investments in the accounts opened through this public clearinghouse would be held and managed by private financial institutions, who to the greatest extent possible would manage administrative and transactional support. "
That is a government run plan that then outsources to other institutions. This is classic government bueracracy.
If the government is involved, MDP, I'm with you. There will be fees or taxes or some form of collecting money. Our government doesn't give us anything we haven't already paid for. Well, I take that back. That we won't pay for and pay for and pay for...because there was no money there and they had to borrow it.
I don't understand this comment, MDP.
Do you people really think about what you write before you write it? Face it - the money will not be there for you because of the shameless raiding that has been going on for years of the SS fund by our Congress - by both parties. It's been their free checking account. They always left the worry for the next incumbent while they had their hands in the cookie jar, getting what they could for their states. And no one in the states complained about what they got, did they? Don't be hypocritical now. Just realize that it's NOT going to be there for you when you retire, start living more frugally and start saving.
Both my kids are still in college and both have Roth IRA into which they put a certain amount each month. They don't treat themselves to anything unless they have some money left over after this monthly payment. And they both go to school full time and hold down part time jobs and work full time over summer vacations. Be a good savings example for your kids, and teach them to save, too.
Someone on Gather actually had the audacity to call her a moderate. This plan is about as moderate as a brick.
For those who are disgusted with the "return" on their social security; for those who can't believe the amount of red tape the government requires before you can build something; for those who cringe when they (or their parents) have to deal with Medicare - rememember that all this plan will accomplish is more of the same.
To quote Renaldo Maximus (aka President Reagan): "Outside of its legitimate function, government does nothing as well or as economically as the private sector."
So quit with the sarcasm - it doesn't become you.
If I was Schwab,Fidelity or Principal, I would lower fees to get that Government cotract. Unless Bush is still awarding no bid contracts to his cronies.
Anyone who thinks this is a bad idea probably just hates the fact that it came from Hillary.
I can't believe all the Fiscal Conservatives who spout AFTER BUSH TRASHED OUR TREASURY, WHERE WERE THEY WHEN BUSH INHERITED A SURPLUS AND SQUANDERED IT AWAY AND THEN SOME?!!
Personally, I don't think this is a terrible idea. It's a good way to get people to start saving money (which god knows this country has a problem doing) and is a sort of beneifit to those workers who don't get it from their job. Ironically, this would be a supply-sider's dream because whatever taxes raised to do this would reduce investment by the marginal propensity to save for the tax bracket in question (which for the country as a whole is actually negative), but would increase investment by the total amount taxed. Basically, this means that this move would increase the country's net investment, which drives economic growth.
She's going to pay for all of that by taxing dead people. A person can't work hard all his life and become succesful and pass it on to his heirs. The Government will take as much as 50% or more for "escate tax". That is one of the taxes Ron Paul wants to eliminate. Don't think that is just for the rich it hits everyone regardless of station in life. It is a punishment for dieing with money in the bank.
Many family farms have been lost because of estate taxes. Many family owned businesses have been lost because of estate taxes.
Christopher, You leave MY social security alone! It is MY money in there and the money of every working person. It don't belong to the Government at all. Before you start talking about taking away the "surplus" you sould find out what it is.
actually evidence shows that an increasing number of family owned buisnesses like resturauants and farms and being hit by this tax. Families are forced to sell the actual buisness just to pay the tax that is just unacceptable.
Regards,
Doyle I <~~~~~
It makes me absolutely want to puke how they manipulate all the simple folk out there. What was that song from Camelot? Oh, what do the simple folk do? They fall for Bush's marketing dummies, that's what!
Regards,
Doyle I <~~~~~
Doyle- Government Policy or Public Policy is about more than what will effect you and me. It is a principal issue. People should not have to pay taxes for stupid reasons such as dying. It is Robin Hood in the worst way; because instead of taking from those who can afford it. You force small buisnesses to close their doors. That is not good for America.
I like this blurb on his book at amazon: From Publishers Weekly
After repeating his mantra—"it's not what you say, it's what people hear"—so often in this book, you'd think that Republican pollster Luntz would have taken his own advice to heart. Yet in spite of an opening anecdote that superficially attempts a balanced tone, the book as a whole truly reads more like a manual for right-wing positioning. Even in the sections where he is less partisan, Luntz's advice is not particularly insightful. For instance, his first chapter, on "Ten Rules of Effective Language," starts by instructing readers to use small words and short sentences in their communications. The least effective section in the book is the chapter on "Personal Language for Personal Scenarios," where Luntz advocates manipulative strategies for getting out of traffic tickets, boarding airplanes at the last minute and apologizing to one's wife with the "miracle elixir" of flowers. The most readable and redeeming feature is the two case studies, where Luntz demonstrates his skill as a communicator by identifying real-world communications successes and failures. Unfortunately, by the time nonpartisan readers reach these chapters, they will have already lost patience. (Jan.)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
Masked Hero.
Clearl you haven't bothered to research this. Paying a percentage in (previously unpaid) taxes only on the appreciated estate value (in 2009 that's $3,500,000) should not cause an issue. If you can't do this, you can't run a business anyway and it's doomed.
"People should not have to pay taxes for stupid reasons such as dying."
nobody pays a tax for dying. They're dead! Inheriting $3,500,000 from somebody who has NOT paid taxes on the appreciated value of the estate is left to the recipient of the multi-million dollar windfall and you cannot name ONE person who has ever paid it OR one person who lost a business due to it. It's very freekin' rare to inherit multiple millions!
"... instead of taking from those who can afford it. You force small buisnesses to close their doors."
Simply not true that [a] they cannot afford it after getting multiple millions and [b] that businesses are closing their doors. Show me ONE case, ANYWHERE. Thought so.
"Taxing people for dying . . . "
Not true. Go back to pom pom pumping for the United White People's College Fund!
Regards,
Doyle I <~~~~~
Executive Summary
This analysis examines the arguments for and against the federal estate tax and concludes that the estate tax generates costs to taxpayers, the economy and the environment that far exceed any potential benefits that it might arguably produce.
This paper documents the extensive costs associated with the federal estate tax. Specifically, the report finds:
The existence of the estate tax this century has reduced the stock of capital in the economy by approximately $497 billion, or 3.2 percent.
The distortionary incentives in the estate tax result in the inefficient allocation of resources, discouraging saving and investment and lowering the after-tax return on investments.
The estate tax is extremely punitive, with marginal tax rates ranging from 37 percent to nearly 80 percent in some instances.
The estate tax is a leading cause of dissolution for thousands of family-run businesses. Estate tax planning further diverts resources available for investment and employment.
The estate tax obstructs environmental conservation. The need to pay large estate tax bills often forces families to develop environmentally sensitive land.
The estate tax violates the basic principles of a good tax system: it is complicated, unfair and inefficient.
In addition, a review of the arguments in favor of the estate tax suggests that the tax produces no benefits that would justify the large social and economic costs.
The estate tax is a "virtue tax" in the sense that it penalizes work, saving and thrift in favor of large-scale consumption.
Empirical and theoretical research indicates that the estate tax is ineffective at reducing inequality, and may actually increase inequality of consumption.
The enormous compliance costs associated with the estate tax are of the same general magnitude as the tax's revenue yield, or about $23 billion in 1998.
The deduction for charitable bequests stimulates little or no additional giving.
The estate tax raises very little, if any, net revenue for the federal government. The distortionary effects of the estate tax result in losses under the income tax that are roughly the same size as estate tax revenue.
http://bestoftoday.gather.com/
The facts are that when that report was done, only 2% of people who died even prompted the filing of an estate tax return. The average size of their estates was $2.4Million, and they paid and average of $454,000 in taxes. Four years later, those figures went to $3.8Million and $671,000. Totaling it, we did - and we do - take in very little money from the estate tax, as well. (Probably enough for a couple of weeks of action in Iraq.)
Even Warren Buffet makes fun of this and questions the logic when he has to only pay 15% on his earnings, and the middle class has to pay twice as much.
Go, MDP, Go! Defend all those poor filthy rich folks! They really appreciate it.
And, as we shouldn't group all very very rich people in the ass-less category, not all repeal proponents are simple folk who are being used. As an analyst in a Federal Reserve bulletin that I reviewed yesterday noted, there is likely an element that some of us believe that we will be wealthy someday and we're looking ahead. There are also people who believe that they have to argue against it to be consistent with other anti-tax or abolish govt positions they take.
Daniel, thanks for the way you just expressed it.
"Doyle, your argument begs the question..."
I see. No answer to the question and you are against taxes period. Got it.
"Doyle the join economic commitee of Congress had this to say about the Estate Tax"
Actually, this is Republican Vice-Chair Jim Saxton who makes all kinds of unsubstantiated statements, doesn't he? Frankly, he's a kook. Even Billionaires William Buffet and Bill Gates support the Estate tax.
"The Fact is Doyle Family farms and buisneses are being lost but you dont care because you just want more money for the government."
I guess that's about as accurate as any other 'facts' you spew.
"You are envious of those that have more than you and you want them punished. "
You lack intelligence and a kidney. Hey, you're the one that started the making stuff up option here.
"It is an unfair tax and should be eliminated."
Nah unhh.
" I skimmed it just now, and it is a joke. "
I did more than skim it and this older report (2003) is not only one-sided, it's another of that RepubliCON kook Saxton's wonders. You know . . . you wonder who financed his campaign to get him there. Saxton never met a tax he didn't want eliminated.
"That hasn't been going so well."
Actually, Social Security's going fine and would have been MORE than solvent if the money Clinton had saved was used for it . . .
Sheryl . . . you're absolutely right.
First this has nothing to do with President Bush, second when I look at a tax I dont care who pays for it. It is a fairness issue. You are correct that our tax system is broken. The answer is not to raise marginal tax rates or keep stupid tax policies around it is about reforming the system. Targeting taxes is just plain wrong. Everyone should pay their share we dont need Robin hood tax policies here. Everyone can make something out of their lives here in America. We should not punish people for making it.
I really don't want to hear the whining over paying a little bit more the more you make. It's already a fact. What I want is EQUITY in taxes. Why should the very rich folks pay a lower tax rate than I do? When the tax laws are reformed to make everyone pay fairly, then I can start talking to you about doing away with taxes. NOT UNTIL THEN.