There are several things characteristic of a free society: the rule of law; consensual, democratic government; individual liberty and the right to speak freely, even to one’s rulers; and respect for private property rights.
Unless, of course, you’re on the Left. In that case, any of these must give way to the Greater Good — as defined by the Left. Free speech? Only if you don’t criticize Obama. Rule of law and consensual, democratic government? Well, if the people’s elected representatives won’t go along, we’ll just use the courts to make the law what we want. Property rights? Ask Kelo.
Next on the property-rights chopping block seem to be our 401K savings:
House Democrats Contemplate Abolishing 401(k) Tax Breaks
Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.
House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.
A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. She testified last week before Miller’s Education and Labor Committee on her proposal.
At that hearing, the director of the Congressional Budget Office, Peter Orszag, testified that some $2 trillion in retirement savings has been lost over the past 15 months.
Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.
The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.
In other words, employers will have no reason to contribute to employee retirement savings, since they won’t get a tax break for them. Yet these plans, juiced by employer contributions, have been a tremendous wealth-creation vehicle, especially for lower-income workers. They also have the benefit of letting the employee decide how the money is invested, if the plan has a self-directed option. (And they all should.)
But not under the Ghilarducci Plan, which has the eye of the Democrats. Instead, your retirement contributions would be mandatory, your savings would be taxed, and, in return, you’d get a whopping $600 per year from Uncle Sam with which to buy 3% savings bonds.
And that’s on top of what you toss into the sinkhole of Social Security.
Given how the Federal Government managed Fannie Mae and Freddie Mac, doesn’t that make you feel all warm and fuzzy inside? Me, neither.
Let me put this bluntly: Anyone with retirement savings who would vote to give the Democrats control of the White House and Congress is out of his or her mind.
RELATED: I wonder if the Democrats were inspired by Argentina’s coming confiscation of private pensions? More on this at Power Line and IBD.
(hat tip: Ed Morrissey)
UPDATE: James Pethokoukis rips into this socialist plan (yes, "socialist," since it takes control of our private pensions) and looks at its implications for the stock market and beyond.