This has to be the scariest thing I've read yet about a possible all-Democrat government: the end of 401(k) investing.
Powerful House Democrats are considering removing all existing 401(k) tax breaks -- goodbye, matching employer contributions! -- and forcing Americans to contribute to a second level of Social Security instead. (Bet you haven't heard about this one from the "Elect Obama" mainstream media...)
Details from Ed Morrissey at Hot Air:
"...your employer can no longer write off their contributions to your 401(k), and your capital gains would be taxable year-on-year. In other words, it becomes just another investment or savings account, with no tax benefit at all, and no employer contribution. Instead, Uncle Sam would give you your 'matching' funds — up to a whopping $600 per year! Whoopee!
"As Michelle Obama says, you could buy a pair of earrings every year … except, of course, you can’t. It’s in The Lockbox, defined by politicians as Locked Away from You but Accessible to Us. It goes there along with 5% of your gross earnings, apparently to play with the 7% of your gross earnings that already goes to Social Security. And what do they do with the money? They give you government bonds as your only investment option."
"The Democrats want to end the private retirement system that has allowed Americans to become a vast investor class and put them back in thrall of the federal government. This is nothing more than a second welfare system that would sit on top of the crumbling Social Security entitlement. It would leave the American working and middle classes with no retirement option other than a government handout.
"If the Democrats control both Congress and the White House, kiss your 401(k)s goodbye, and get into the bread lines first before the crowd arrives."
Senator McCain needs to be hitting this issue hard in ads, starting immediately. A Republican Presidential veto pen is the only thing which can stop this plan from taking place.
Unfortunately, given the current state of the market and everyone's 401(k) plans, the issue may not have the same resonance it would normally have, but voters should also be reminded that historically market dips have always been temporary...always.
Like a lot of Americans, our 401(k), and the generous matching contributions by my husband's employer, provides much of our financial security. If Democrats take that away and instead tax us more for "a new system of guaranteed retirement accounts to which all workers would be obliged to contribute," it would be devastating, not only for American workers everywhere, but for the American economy.
Friday Update: James Taranto of Opinion Journal: "Eyeing Your Pension: Are 401(k)s Safe From Congressional Democrats?"