Drudge Retort: The Other Side of the News
Saturday, October 21, 2017

Proposals floating around Washington to cap the amount that Americans can contribute before taxes to 401(k) plans and individual retirement accounts are unsettling professionals in the retirement industry. Republicans are looking for ways to generate revenue to support broad reductions in individual tax rates. One idea is to limit the amount of pretax money households can sock away for retirement saving. Such a move would likely generate significant political blowback but it hasn't been explicitly ruled out, stirring worry among industry lobbyists. Members of the House Ways and Means Committee are widely expected to release a version of the tax bill by mid-November. Specifics on a wide range of issues remain unclear. Emily Schillinger, a spokeswoman for the Ways and Means Committee, declined to comment.

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Lobbyists and others in the retirement and financial services industries who have spoken to congressional staff and committee members say lawmakers are looking at proposals that would allow 401(k) participants to contribute significantly less than what is currently allowed in a traditional tax-deferred 401(k). An often mentioned amount is $2,400 a year. It isn't clear whether that would only apply to 401(k)s or IRAs or both.

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Further proof how the GOP is a champion for the middle class.

Kill social security. Kill medicare. Cap 401k contributions to $2,400. Create an entire generation of people that will have to work unitl they die.

#1 | Posted by 726 at 2017-10-20 12:32 PM | Reply | Newsworthy 7

"Republicans are looking for ways to generate revenue to support broad reductions in individual tax rates."

And their answer is to jerk around the average Joe so they can give income tax cuts aimed at the wealthiest.

#2 | Posted by Danforth at 2017-10-20 12:34 PM | Reply | Newsworthy 10

I can't imagine this would make it out of committee.

#3 | Posted by eberly at 2017-10-20 12:36 PM | Reply

How do they expect people to ever retire? I don't get the logic? I agree with Eb, won't make it out of committee.

#4 | Posted by truthhurts at 2017-10-20 12:47 PM | Reply

What scum.

#5 | Posted by Zed at 2017-10-20 12:51 PM | Reply

If the DNC could hire a different administrator, then maybe dems could do something about this. until then, proceed as you wish. Just gosh darnit, if they didn't have that administrator. shucks.

#6 | Posted by BruceBanner at 2017-10-20 01:07 PM | Reply

"How do they expect people to retire".

They don't.

In fact, they go out of their way to make it as hard as possible to be secure and comfortable. Secure and comfortable people aren't easily manipulated by fear. Just look at their "base".

#7 | Posted by ChiefTutMoses at 2017-10-20 01:12 PM | Reply | Newsworthy 4

"I can't imagine"

Baloney

Same as "Mark My Words" and "You Just Wait" coming from You trite bastards

As usual, obtuse Eberly tries to normalize this but the fact remains one of his own cooked up this scheme based on an ideology that is nothing but schemes

#8 | Posted by ChiefTutMoses at 2017-10-20 01:18 PM | Reply | Newsworthy 1

I can't imagine this would make it out of committee.

#3 | Posted by eberly

Seriously? After the crap that has made it to vote this year already?

#9 | Posted by GalaxiePete at 2017-10-20 01:49 PM | Reply

Ebs wants you to believe the Koch's and the Hilton's have their "retirement" in a 401, cause you know, he thinks everyone is as stupid as the "conservative" base of yokels.

The real republicans constituents and beneficiaries of their efforts don't have 401k's. That's for the unwashed little people

#10 | Posted by ChiefTutMoses at 2017-10-20 01:54 PM | Reply

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How do they expect people to ever retire?

The answer is they don't care. Could there ever be any other answer?

#11 | Posted by 726 at 2017-10-20 01:59 PM | Reply | Newsworthy 4

Again, I smell someone lurking around here.

disgusting, I tell you.

The reason why I don't think it'll make it out of committee is because of the hurt it will put on a lot of wall street firms. They prosper from the massive flow of $$ from 401K contributions....this would hit it hard.

What congressman would benefit from voting to narrow contributions this much? How would they benefit? what special interest group would want them to do this?

#12 | Posted by eberly at 2017-10-20 02:06 PM | Reply

Higher current taxes to offset cuts for the rich

#13 | Posted by truthhurts at 2017-10-20 02:09 PM | Reply

Plus it will push people like me into higher brackets as compared to what I would pay in the income when I retired

#14 | Posted by truthhurts at 2017-10-20 02:10 PM | Reply

Okay...I see that. More tax revenue coming from the middle class reducing the pressure to raise taxes on the wealthy.

but it would be such an unpopular move.

most of how we have screwed the middle class has been through more stealth-type moves.

Give folks tax credits or tax rate reductions on a federal level which cuts off funding for states and then states have to raise sales and property taxes....that is a popular way most dopes believe their taxes are lower when they aren't.

this idea would be easy for joe schmo to immediately recognize they are being screwed. There are millions of middle class folks who participate in a 401K and their employer matches who would get screwed over this.

Way too hostile of an issue to get through. Again....won't make it out of committee.

#15 | Posted by eberly at 2017-10-20 02:16 PM | Reply

The Federal government has been eyeing 401K accounts for a while now.

MYRA is the first step toward government appropriating 401K accounts.

#16 | Posted by JeffJ at 2017-10-20 02:42 PM | Reply

Now to start screwing the Millennials.

#17 | Posted by fresno500 at 2017-10-21 04:15 PM | Reply

Tax "reform" always seems to hurt the average Joe.

#18 | Posted by cbob at 2017-10-21 05:24 PM | Reply | Newsworthy 2

Is this some cockamamie plan to make more income subject to income taxation?

#19 | Posted by snoofy at 2017-10-21 05:29 PM | Reply

The reason why I don't think it'll make it out of committee is because of the hurt it will put on a lot of wall street firms. They prosper from the massive flow of $$ from 401K contributions....this would hit it hard.
#12 | POSTED BY EBERLYM

It might be a trial balloon. Somewhere down the line they'll likely make it more difficult to collect SS.

#20 | Posted by Ray at 2017-10-21 05:53 PM | Reply

"What congressman would benefit from voting to narrow contributions this much?"

Ones with very poor constituents who aren't offered retirement plans in the first place, but needs a way to pay for Trump's wall?

Your Congressman, probably.

#21 | Posted by snoofy at 2017-10-21 05:58 PM | Reply

secure.marketwatch.com

#22 | Posted by jamesgelliott at 2017-10-21 07:29 PM | Reply

But, but, her emails...

#23 | Posted by WhoDaMan at 2017-10-21 10:45 PM | Reply

"MYRA is the first step toward government appropriating 401K accounts."

Please explain, in detail.

#24 | Posted by Danforth at 2017-10-22 10:09 AM | Reply

"Somewhere down the line they'll likely make it more difficult to collect SS."

Pushing full retirement age back is a great way to keep people working and not collecting.

I'm afraid I'm going to have a huge tax bomb on my hands when I retire.
The required minimum distribution rule may kill me.

I'm 48 years old and I can already see it.

#25 | Posted by eberly at 2017-10-22 10:12 AM | Reply

I'm 48 years old and I can already see it.
#25 | POSTED BY EBERLY

Under current law, that brings you to the year 2035 before you are eligible for full benefits.
Considering that the system is built on a mirage of debt, deratives and IOUs that are doubling about every eight years.
If I were in your position, I would not count on having anything left to tax.

#26 | Posted by Ray at 2017-10-22 10:32 AM | Reply

26

Made my day.....LOL

#27 | Posted by eberly at 2017-10-22 11:11 AM | Reply

Talking about mirages.

Consider the self serving flaws of GDP statistics. They only count the spending side of the ledger as if spending equates with increases in wealth. GDP also counts govenment spending as if it contributed to the production of wealth.

fred.stlouisfed.org

This chart subtracts corporate debt from GDP. Adding other debts would make it look worse.

www.acting-man.com

Bottom line: the American economy is in steep decline.

#28 | Posted by Ray at 2017-10-22 11:39 AM | Reply

"Bottom line: the American economy is in steep decline."

You've been wearing that same sandwich board since (at least) 2005. Dow 1400, anyone?

#29 | Posted by Danforth at 2017-10-22 11:51 AM | Reply | Newsworthy 1

"The required minimum distribution rule may kill me."

Current longevity tables start at 97.5 years, and they'll probably be updated within the next two decades.

One great trick is to delay the distribution of the RMD until December 20th. This gives two advantages:
1) The investments stays in longer, making more returns, year after year. The first year, for example, you must take out 3.64% of your Jan 1 balance. If by December 20th, the investments return 5%, you'll have a larger balance in the new year than the prior year, even after the distribution.
2) You've still got 10 days to insure the distribution occurred. If not, that's legally your fault. The IRS tacks on what you should have taken out to your income, and then adds a 50% penalty. My mantra in regards to RMDs is Either you take it or they take it.

#30 | Posted by Danforth at 2017-10-22 12:00 PM | Reply

You've been wearing that same sandwich board since (at least) 2005. Dow 1400, anyone?
#29 | POSTED BY DANFORTH

You're supposed to be an accountant with business experience. I just showed a chart of GDP minus corporate debt.
And it means nothing to you.

I don't think you go out of your way to be stupid.

#31 | Posted by Ray at 2017-10-22 12:09 PM | Reply

Dow 1400, anyone?

You're ten years out of date genius.

Dow 40,000 before the decade is over.

#32 | Posted by Ray at 2017-10-22 12:30 PM | Reply

The GOP has been openly hostile to the middle and lower classes for a while now. Mind as well when it has no consequences. But remember: Never waste your vote on real change.

#33 | Posted by Sully at 2017-10-22 12:59 PM | Reply | Newsworthy 1

30

Thanks. Now, that doesn't start till age 70, right?

#34 | Posted by eberly at 2017-10-22 01:22 PM | Reply

"Considering that the system is built on a mirage of debt"

Wait... the debt's a mirage???

One would think that would be good news!

#35 | Posted by snoofy at 2017-10-22 03:19 PM | Reply

Wait... the debt's a mirage???
One would think that would be good news!
#35 | POSTED BY SNOOFY

I can imagine what your personal finances look like.

#36 | Posted by Ray at 2017-10-22 03:32 PM | Reply

"I can imagine what your personal finances look like."

Noone's asking you to.

#37 | Posted by snoofy at 2017-10-22 03:33 PM | Reply

Noone's asking you to.
#37 | POSTED BY SNOOFY

Since when do I need your permission. If debt is wealth, you must living well.

#38 | Posted by Ray at 2017-10-22 03:45 PM | Reply

So... is debt wealth or not?
Also is the debt a mirage or not?
Actually... just keep your mouth shut.

#39 | Posted by snoofy at 2017-10-22 03:52 PM | Reply

You can have last word.

#40 | Posted by Ray at 2017-10-22 03:58 PM | Reply

401K is a strategy employed bu the upper class to hide money from taxation. That's stealing from the government. Worse, it's diverted into the the hands of Wall Street. Abolish 401K and return power to the government where it belongs.

#41 | Posted by TylerDurden at 2017-10-22 06:41 PM | Reply

I can't imagine this would make it out of committee.
#3 | Posted by eberly at 2017-10-20 12:36 PM

One of their first acts was to "Kill Big Bird", they argue whether to fund CHIP, so you have got to be kidding about Republicans interest in family security.

We need a revolution.

#42 | Posted by redlightrobot at 2017-10-22 06:49 PM | Reply

First the republicans deregulated pension laws and allowed companies to spend "excess" pension funds which really were not excess at all and made pension fund contributions voluntary.

Then when the predictable happened and pensions did not have the funds to pay out, They said pensions were a bad idea

Then they wages a huge PR campaign to convince people that 401(k)s with no guarantee were a better idea despite the fact that there is no way to accurately plan for a random market downturn the day after you hit your goal and retire.

They got people to buy in by bribing them with company matching.

They managed to convince people that taking home salary MINUS 401(k) contribution is better than taking home salary PLUS getting a pension. They managed to convince people that paying for their own retirement fund out of their salary with no guarantee was better than getting a pension ON TOP OF their salary

They fooled people who could always open a stock account that being allowed to buy stock with part of their salary was a benefit

The one redeeming thing about 401(k)s was the tax advantages.

Now the republicans want that money to fund their military expansion

#43 | Posted by hatter5183 at 2017-10-22 08:00 PM | Reply | Newsworthy 1

First the republicans deregulated pension laws and allowed companies to spend "excess" pension funds which really were not excess at all and made pension fund contributions voluntary.

Then when the predictable happened and pensions did not have the funds to pay out, They said pensions were a bad idea

Then they wages a huge PR campaign to convince people that 401(k)s with no guarantee were a better idea despite the fact that there is no way to accurately plan for a random market downturn the day after you hit your goal and retire.

They got people to buy in by bribing them with company matching.

They managed to convince people that taking home salary MINUS 401(k) contribution is better than taking home salary PLUS getting a pension. They managed to convince people that paying for their own retirement fund out of their salary with no guarantee was better than getting a pension ON TOP OF their salary

They fooled people who could always open a stock account that being allowed to buy stock with part of their salary was a benefit

The one redeeming thing about 401(k)s was the tax advantages.

Now the republicans want that money to fund their military expansion

#44 | Posted by hatter5183 at 2017-10-22 08:00 PM | Reply

"You're ten years out of date genius.
Dow 40,000 before the decade is over."

Gee...another opportunity to be dead wrong.

Will that stop you from yammering about topics on which your ignorant, or will there be more claims of dumb Dow predictions and 90% of cancers curing themselves?

#45 | Posted by Danforth at 2017-10-22 10:45 PM | Reply

"You're supposed to be an accountant"

Well, you're just a font of ignorance, aren't you?

#46 | Posted by Danforth at 2017-10-22 10:50 PM | Reply

"topics on which you're ignorant"

Gee. My own self-retorting retort.

#47 | Posted by Danforth at 2017-10-22 10:58 PM | Reply

#44 pretty much nails it.

With Social Security existing as a cruel joke and pension going the way of the Dodo, messing with 401k is highly irresponsible.

If you don't think they've done so already, this move removes any pretense the GOP had that they aren't out to screw the middle class.

One had to wonder how much abuse Americans will meekly suffer before the torches and pitchforks come out. Allowing a fraction of percent of the population to take everything hardly makes us the home of the brave. More like home of the bitch.

#48 | Posted by Sully at 2017-10-23 10:51 AM | Reply

"They managed to convince people that taking home salary MINUS 401(k) contribution is better than taking home salary PLUS getting a pension. They managed to convince people that paying for their own retirement fund out of their salary with no guarantee was better than getting a pension ON TOP OF their salary

They fooled people who could always open a stock account that being allowed to buy stock with part of their salary was a benefit"

a few retorts to that. I agree with the premise that getting people to invest their money rather than the company was a nice shift but.......I own my 401K. The company does not. Pensions are not guaranteed in all reality if you pay attention to what's happened to public pensions around the country. My 401K has conservative options that allow me to have pretty save investments. My company matches contributions. I can get aggressive in my 401K.

I'm glad I own my 401K rather than having my retirement nest egg owned by someone else. Would a pension with a monthly income layed out for me be nice? Yes.....

#49 | Posted by eberly at 2017-10-23 11:39 AM | Reply

The 2/3 of Americans workers without 401(K)s think you educated fat cats are the problem, that's why they voted for Trump.

The pitchforks aren't coming the way you think, Sully.

#50 | Posted by snoofy at 2017-10-23 11:44 AM | Reply | Newsworthy 2

30
Thanks. Now, that doesn't start till age 70, right?

#34 | POSTED BY EBERLY AT 2017-10-22 01:22 PM | FLAG:

RMD's start at age 70 and 1/2 and have to start by April 1 following the year you turn 70 and 1/2. Thereafter they are due by December 31. It may be tempting to wait until April 1 following the year you turn 70 and 1/2, but that pushes two RMD's into the same tax year (the second one due by 12/31) and may put you into a higher tax bracket for the year.

#51 | Posted by 726 at 2017-10-23 11:48 AM | Reply

Pensions are insured by the government to a certain amount and when funding requirements are in place they are relatively safe. They area huge expense and that is why they are going away. It is possible for a pension to run into major trouble for a reason other than intentional bad behavior but not as common as we are led to believe. If run correctly they are safe but expensive.

#52 | Posted by Sully at 2017-10-23 11:50 AM | Reply

People used to have pension and 401k. The either/or narrative is not historically accurate.

#53 | Posted by Sully at 2017-10-23 11:54 AM | Reply

Tax "reform" always seems to hurt the average Joe.

#18 | POSTED BY CBOB AT 2017-10-21 05:24 PM | REPLY | FLAG

The plan always was to shift the cost of government off of the 1% and onto the rest of society by the GOP. That is why they are always such fans of regressive taxes or "reform" that eliminates deductions that are used by the middle class.

The funny thing is that with the insistence that the stat and local tax deduction be eliminated to fund the 1% tax cut while preserving the mortgage interest and charitable donation deduction they will hurt both lobbies anyways. Many people will curtail their giving and home purchases if they cannot itemize anyways because of the loss of the SALT deduction.

#54 | Posted by 726 at 2017-10-23 11:56 AM | Reply

Pensions are insured by the government to a certain amount

Lately that has been equating to 20 - 33% of what they are worth.

Look at Delphi, when it went ---- up, the pensions were cut benefits to 30% and then the bankruptcy judge granted huge bonuses to management.

#55 | Posted by 726 at 2017-10-23 12:02 PM | Reply

"People used to have pension and 401k. The either/or narrative is not historically accurate."

Speaking of historical accuracy, nowadays most workers have neither a pension nor a 401(K).

You might also have heard that "Since 1975, nearly all the gains in household income have gone to the top 20% of households."

These things go hand in hand. A multi-generational redistribution of wealth, upwards.

It's the slow agonizing death of the American Dream, a dream whites think they're entitled to.

#56 | Posted by snoofy at 2017-10-23 12:18 PM | Reply

51

Thanks!

#57 | Posted by eberly at 2017-10-23 01:56 PM | Reply

Pensions are insured by the government to a certain amount
Lately that has been equating to 20 - 33% of what they are worth.
Look at Delphi, when it went ---- up, the pensions were cut benefits to 30% and then the bankruptcy judge granted huge bonuses to management.

#55 | POSTED BY 726 AT 2017-10-23 12:02 PM | REPLY

By design due to republican deregulation.

Pensions are safer and cheaper for both the business and the employee if initial funding is made and the money is not raided by the company.

The way they were supposed to work is worker gets promised X now and Y later with an 8 or 10 year vesting. Historically the S%P 500 averages about 8% gain. To be safe deposits used to be required so that as long as they averaged 4% they would be solvent. So instead of paying the employee X+Y up front they pay X and deposit .68Y in the fund. If it gets 4% after 10 years 0.68Y has turned into Y. If it gets 8% It would be 1.46Y. If that were to happen the "excess" funds are still not excess. They are there to average out the times that the fund only grows at 1% or *gasp* loses money. In the original setup none of the pension money was owned by the company. The entire amount was owned by employees and pensioners. The only money that was returned to the company was deposits made on behalf of employees who teminated before they vested.

When run as designed pensions worked very well. A great example is the State of Wisconsin. It is the 24th largest pension fund in the world. Because of language in the state constitution the changes to pension law that doomed most pensions did not affect it. The Wisconsin plan has a $2.5 Billion surplus.

projects.jsonline.com

Republican Governor Tommy Thompson tried to raid the fund in 1999 but got spanked by the state supreme court. Republican Governor Scott Walker has openly stated he wants to reduce pension benefits because like all republicans he sees pension funds as a piggy bank he can rob

#58 | Posted by hatter5183 at 2017-10-23 02:51 PM | Reply

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