It's an idea that's been brewing for a while beneath the radar in the nation's capital--whether 401(k)s are really "tax shelters" for the rich and should be taxed, if not confiscated and dumped into the Social Security Trust Fund.
Critics on the Left view 401(k)s as a scheme concocted by the nation's wealthy so they could retire "swell," having contributed enough to make 401(k) plans work for them in retirement. Meanwhile, not having those excess dollars to stash away, the masses must rely on Social Security which, even the critics of 401(k) plans are willing to admit, can't provide financial security for the nation's retirees.
Economists Monique Morrissey and Natalie Sabadish, co-authors of a report from the Economic Policy Institute, note:
Critics on the Left view 401(k)s as a scheme concocted by the nation's wealthy so they could retire "swell," having contributed enough to make 401(k) plans work for them in retirement. Meanwhile, not having those excess dollars to stash away, the masses must rely on Social Security which, even the critics of 401(k) plans are willing to admit, can't provide financial security for the nation's retirees.
Economists Monique Morrissey and Natalie Sabadish, co-authors of a report from the Economic Policy Institute, note:
401(k)s were never designed to replace pensions for most workers. They serve primarily as a tax shelter for high earners. The 401(k) revolution has been a disaster [italics added] yet some policymakers are calling for cuts to Social Security, which will be the only significant source of retirement income for most Americans--if they are able to retire in the first place.
Note the new mantra from those on the Left, like Morrissey and Sabadish: "Retirement-income inequality." That is, the much-touted (and not well-substantiated) income gap between rich and poor during their working years has been cleverly extended into the retirement years through the stealthy and maniacal vehicle of the 401(k) plan. Yep, the rich will retire "swell," but the poor will never be able to afford to retire. Such economic and social injustice perpetrated on the part of greedy capitalists!
Consider this gem of rhetoric:
Consider this gem of rhetoric:
Retirement-income inequality has grown in part because most 401(k) participants are required to contribute to these plans in order to participate, whereas workers are automatically enrolled in defined-benefit pensions and, in the private sector, are not required to contribute to these plans. Thus, higher-income workers are much more likely to participate in defined-contribution plans. In addition, higher-income workers have more disposable income and a higher investment-risk tolerance, receive larger tax breaks, and are more likely to work for employers that provide generous matches.
What the likes of Morrisey and Sabadish don't like is that the 401(k) "revolution" has worked. Since their inception, more Americans than ever have learned to save pre-tax income for retirement and, for the most part, have seen returns on those savings that could never be matched by Social Security. Yes, they do very well, thank you very much...and why shouldn't they do well? What's wrong with earning a decent return on investment? And, yes, many have retired "swell." By the way, those savings--for the most part invested in mutual funds--also have benefited the nation's economic growth more than any government project could.
The problem for Morrissey and Sabadish is that lower-income workers don't get to participate in this benefit of employment enjoyed by many middle- and upper- income workers. Their employers, squeezing their employees for every penny they can, won't provide a 401(k) plan. But, wasn't Social Security implemented precisely to provide for lower-income workers to they would have a retirement "safety net"?
The fact that Social Security currently isn't working and will no longer work for lower-income workers points not to the rich having implemented a stealthy and maniacal social policy to keep themselves rich in retirement and the poor impoverished in retirement but to the Left's failed policy.
Leftists will do everything they can to point the finger of blame and to use class warfare as an excuse to deflect attention away from the real issue: To admit the failure of their much-cherished social policies.
It's this generation's young people who had better wake up...and quickly. The Left has plenty in store for them if they can seize control of the three branches of the federal government...especially to increase taxes so the Left can continue fueling its failed policy of "social security for all." Increasing taxes will inevitably decrease net income, leaving less to stash away in the hope of retiring "swell" and further hindering the nation's economic growth.
"And to all a good night!"
Let the discussion begin...
To read the Morrissey and Sabadish report, click on the following link:
http://www.epi.org/publication/retirement-inequality-chartbook/
The problem for Morrissey and Sabadish is that lower-income workers don't get to participate in this benefit of employment enjoyed by many middle- and upper- income workers. Their employers, squeezing their employees for every penny they can, won't provide a 401(k) plan. But, wasn't Social Security implemented precisely to provide for lower-income workers to they would have a retirement "safety net"?
The fact that Social Security currently isn't working and will no longer work for lower-income workers points not to the rich having implemented a stealthy and maniacal social policy to keep themselves rich in retirement and the poor impoverished in retirement but to the Left's failed policy.
Leftists will do everything they can to point the finger of blame and to use class warfare as an excuse to deflect attention away from the real issue: To admit the failure of their much-cherished social policies.
It's this generation's young people who had better wake up...and quickly. The Left has plenty in store for them if they can seize control of the three branches of the federal government...especially to increase taxes so the Left can continue fueling its failed policy of "social security for all." Increasing taxes will inevitably decrease net income, leaving less to stash away in the hope of retiring "swell" and further hindering the nation's economic growth.
"And to all a good night!"
Let the discussion begin...
To read the Morrissey and Sabadish report, click on the following link:
http://www.epi.org/publication/retirement-inequality-chartbook/
RSS Feed
