Democratic leaders in the U.S. House discuss confiscating 401(k)s, IRAs
By Karen McMahan
November 04, 2008
RALEIGH Democrats in the U.S. House
have been conducting hearings on proposals to confiscate workers personal
retirement accounts including 401(k)s and IRAs âand convert them to accounts
managed by the Social Security Administration.Triggered by the financial crisis
the past two months, the hearings reportedly were meant to stem losses incurred
by many workers and retirees whose 401(k) and IRA balances have been shrinking
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.
Oh, but it gets better, my friend...it's not all your money...
All workers would have 5 percent of their annual pay deducted 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
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.
Hey, they have to prop up the broke SocSec account somehow and if you bastards stop dying off in a timely fashion, well...
Fools. Move that money before you can't. I think mine will be sunk into tangible wealth against the coming storm.