Since reducing the federal government’s massive wasteful spending is out of the question with a socialist in the White House, our rulers need to look for new ways to squeeze money out of us if they are to stave off national bankruptcy. Willie Sutton supposedly said he robbed banks because “that’s where the money is.” Much of our money is in our IRA and 401(k) retirement accounts. Therefore, the Obama-affiliated establishment media has been making the case for looting them. From Slime magazine:
To maintain this savings incentive the government “spends” [i.e., delays the theft of] $100 billion a year in the form of tax breaks to those who stash money in these kinds of accounts. Now, a new study suggests this tax incentive does little to change saving behavior. Some lawmakers, no doubt, are wondering: Why keep an expensive tax incentive that does not incent?
The study, reported in The New York Times [the quasi-official mouthpiece of the Obama regime], comes from Raj Chetty and John N. Friedman of Harvard, Soren Leth-Petersen and Tore Olsen of the University of Copenhagen, and Torben Heien Nielsen of the Danish National Center for Social Research. It looked at data from Denmark, where the pension system is similar to that in the U.S., and found that every dollar that government spent on tax breaks increased total savings by about one penny.
That’s not much of a payoff. Meanwhile, the Tax Policy Center in Washington has found that about 80% of retirement savings benefits flow to the top 20% of earners. Eliminating the deduction for retirement savings would hit the well-off disproportionately, a condition with a lot of appeal in the current political climate.
That is, a climate dominated by Marxist demagogues like Obama.
Taxing IRAs won’t even pay for Obama’s “stimulus” bills. To steal enough money to put off economic collapse until after 2016, they will have to seize our retirement accounts outright. Unlike meaningful spending cuts, that is very much on the table.
On a tip from Ghost of FA Hayek.