Economists propose axing 401(k), IRA tax benefits to help fund Social Security

[1srelluc]

'Talk about robbing Peter to pay Paul': Economists propose axing 401(k), IRA tax benefits to help fund Social Security — but some retirement experts are lashing back

Funding for Social Security is projected to run dry in less than a decade.

finance.yahoo.com

A new brief from the Center for Retirement Research at Boston College makes the case for scrapping tax benefits on retirement plans like 401(k)s and IRAs, potentially adding billions of dollars in U.S. tax revenue each year.

Economists Alicia Munnell and Andrew Biggs argue how subsidies for these retirement plans, which they say fail to “significantly boost national saving,” could be diverted to fund Social Security instead — which is set to run short of cash by 2033.

“It makes little sense to throw more and more taxpayer money at employer plans and IRAs,” the duo wrote in the brief. “In fact, the case is strong for eliminating the current tax expenditures on retirement plans and using the increase in tax revenue to address Social Security’s long-term financing shortfall.”

Americans saving up for their golden years get to defer taxes on contributions to retirement plans, like 401(k)s and IRAs, which they only pay on withdrawals in retirement. But deferring their taxes not only squeezes the future savings they get to enjoy in retirement, it also leaves potential tax revenue on the table.

The brief points to Treasury estimates that the tax preference for employer-sponsored retirement plans and IRAs reduced federal income taxes by about $185 billion in 2020 — equivalent to about 0.9% of gross domestic product.

What’s more, the tax expenditures for retirement savings plans are actually more likely to benefit higher earners. The Tax Policy Center estimates nearly 60% of those benefits went to taxpayers earning at least $167,000 annually, while more than 38% went to those making $245,000 or more in 2020.

Why? Higher earners are more likely to have access to employer-sponsored retirement plans, are more likely to participate in them and contribute more when they do participate, the brief states.

The researchers also calculated, based on Federal Reserve data, that between 1989 and 2022, the share of workers aged 25 to 64 who participate in employer-sponsored retirement plans rose by a meager two percentage points, from 51% to 53%.

Meanwhile, Social Security benefits are a major source of income for low-income seniors, many of whom rely on these checks to cover the cost of essentials. Additional financing would allow the program to continue paying beneficiaries in full for an extended period of time.

Not everyone is convinced by Munnell and Biggs’s proposal to reduce or eliminate tax preferences for retirement plans.

“Talk about robbing Peter to pay Paul,” Brian Graff, CEO of the American Retirement Association, told the National Association of Plan Advisors (NAPA). “It’s absurd to take away the incentives from a system that’s actually working to give money to a system that has fundamental challenges.”

LOL.....The Center's sponsors page is all you need to know about them.....

Sponsors

crr.bc.edu

I mean I think I agree.....We’re just not taxed enough really.

Sales tax, income tax, property tax, vehicle tax, inventory tax, capital gains tax, fuel tax. Yes sir, there’s still some meat left on the bone there.

Here's a much better Idea....Free of charge.....Massively crack down on SS disability and Medicaid.

 

[Oddball]

401(k)s and IRAs are a scams to increase tax receipts....Still isn't enough for the parasite class.

 

[odanny]

How about dropping the exemption after earning $168,000 a year? Do millionaires and above reject their Social Security checks?

Ayn Rand signed up for Social Security in the 70's.

 

[Toddsterpatriot]

How about dropping the exemption after earning $168,000 a year? Do millionaires and above reject their Social Security checks?

Ayn Rand signed up for Social Security in the 70's.

If they pay twice as much into the system, will they get twice the benefit?

 

[ThunderKiss1965]

'Talk about robbing Peter to pay Paul': Economists propose axing 401(k), IRA tax benefits to help fund Social Security — but some retirement experts are lashing back

Funding for Social Security is projected to run dry in less than a decade.

finance.yahoo.com

A new brief from the Center for Retirement Research at Boston College makes the case for scrapping tax benefits on retirement plans like 401(k)s and IRAs, potentially adding billions of dollars in U.S. tax revenue each year.

Economists Alicia Munnell and Andrew Biggs argue how subsidies for these retirement plans, which they say fail to “significantly boost national saving,” could be diverted to fund Social Security instead — which is set to run short of cash by 2033.

“It makes little sense to throw more and more taxpayer money at employer plans and IRAs,” the duo wrote in the brief. “In fact, the case is strong for eliminating the current tax expenditures on retirement plans and using the increase in tax revenue to address Social Security’s long-term financing shortfall.”

Americans saving up for their golden years get to defer taxes on contributions to retirement plans, like 401(k)s and IRAs, which they only pay on withdrawals in retirement. But deferring their taxes not only squeezes the future savings they get to enjoy in retirement, it also leaves potential tax revenue on the table.

The brief points to Treasury estimates that the tax preference for employer-sponsored retirement plans and IRAs reduced federal income taxes by about $185 billion in 2020 — equivalent to about 0.9% of gross domestic product.

What’s more, the tax expenditures for retirement savings plans are actually more likely to benefit higher earners. The Tax Policy Center estimates nearly 60% of those benefits went to taxpayers earning at least $167,000 annually, while more than 38% went to those making $245,000 or more in 2020.

Why? Higher earners are more likely to have access to employer-sponsored retirement plans, are more likely to participate in them and contribute more when they do participate, the brief states.

The researchers also calculated, based on Federal Reserve data, that between 1989 and 2022, the share of workers aged 25 to 64 who participate in employer-sponsored retirement plans rose by a meager two percentage points, from 51% to 53%.

Meanwhile, Social Security benefits are a major source of income for low-income seniors, many of whom rely on these checks to cover the cost of essentials. Additional financing would allow the program to continue paying beneficiaries in full for an extended period of time.

Not everyone is convinced by Munnell and Biggs’s proposal to reduce or eliminate tax preferences for retirement plans.

“Talk about robbing Peter to pay Paul,” Brian Graff, CEO of the American Retirement Association, told the National Association of Plan Advisors (NAPA). “It’s absurd to take away the incentives from a system that’s actually working to give money to a system that has fundamental challenges.”

LOL.....The Center's sponsors page is all you need to know about them.....

Sponsors

crr.bc.edu

I mean I think I agree.....We’re just not taxed enough really.

Sales tax, income tax, property tax, vehicle tax, inventory tax, capital gains tax, fuel tax. Yes sir, there’s still some meat left on the bone there.

Here's a much better Idea....Free of charge.....Massively crack down on SS disability and Medicaid.

They have to keep funding the largest Ponzi scheme in history somehow.

 

[Fort Fun Indiana]

'Talk about robbing Peter to pay Paul': Economists propose axing 401(k), IRA tax benefits to help fund Social Security — but some retirement experts are lashing back

Funding for Social Security is projected to run dry in less than a decade.

finance.yahoo.com

A new brief from the Center for Retirement Research at Boston College makes the case for scrapping tax benefits on retirement plans like 401(k)s and IRAs, potentially adding billions of dollars in U.S. tax revenue each year.

Economists Alicia Munnell and Andrew Biggs argue how subsidies for these retirement plans, which they say fail to “significantly boost national saving,” could be diverted to fund Social Security instead — which is set to run short of cash by 2033.

“It makes little sense to throw more and more taxpayer money at employer plans and IRAs,” the duo wrote in the brief. “In fact, the case is strong for eliminating the current tax expenditures on retirement plans and using the increase in tax revenue to address Social Security’s long-term financing shortfall.”

Americans saving up for their golden years get to defer taxes on contributions to retirement plans, like 401(k)s and IRAs, which they only pay on withdrawals in retirement. But deferring their taxes not only squeezes the future savings they get to enjoy in retirement, it also leaves potential tax revenue on the table.

The brief points to Treasury estimates that the tax preference for employer-sponsored retirement plans and IRAs reduced federal income taxes by about $185 billion in 2020 — equivalent to about 0.9% of gross domestic product.

What’s more, the tax expenditures for retirement savings plans are actually more likely to benefit higher earners. The Tax Policy Center estimates nearly 60% of those benefits went to taxpayers earning at least $167,000 annually, while more than 38% went to those making $245,000 or more in 2020.

Why? Higher earners are more likely to have access to employer-sponsored retirement plans, are more likely to participate in them and contribute more when they do participate, the brief states.

The researchers also calculated, based on Federal Reserve data, that between 1989 and 2022, the share of workers aged 25 to 64 who participate in employer-sponsored retirement plans rose by a meager two percentage points, from 51% to 53%.

Meanwhile, Social Security benefits are a major source of income for low-income seniors, many of whom rely on these checks to cover the cost of essentials. Additional financing would allow the program to continue paying beneficiaries in full for an extended period of time.

Not everyone is convinced by Munnell and Biggs’s proposal to reduce or eliminate tax preferences for retirement plans.

“Talk about robbing Peter to pay Paul,” Brian Graff, CEO of the American Retirement Association, told the National Association of Plan Advisors (NAPA). “It’s absurd to take away the incentives from a system that’s actually working to give money to a system that has fundamental challenges.”

LOL.....The Center's sponsors page is all you need to know about them.....

Sponsors

crr.bc.edu

I mean I think I agree.....We’re just not taxed enough really.

Sales tax, income tax, property tax, vehicle tax, inventory tax, capital gains tax, fuel tax. Yes sir, there’s still some meat left on the bone there.

Here's a much better Idea....Free of charge.....Massively crack down on SS disability and Medicaid.

The understand they live in a society where one major party licks the boots of rich people. So they are searching for any solution but the obvious one, which GOP bootlickers will not allow.

 

[Fort Fun Indiana]

They have to keep funding the largest Ponzi scheme in history somehow.

You don't know what a Ponzi scheme is and should probably not comment again until you read up.

Hint: people will never stop being born or working.

 

[Toddsterpatriot]

'Talk about robbing Peter to pay Paul': Economists propose axing 401(k), IRA tax benefits to help fund Social Security — but some retirement experts are lashing back

Funding for Social Security is projected to run dry in less than a decade.

finance.yahoo.com

A new brief from the Center for Retirement Research at Boston College makes the case for scrapping tax benefits on retirement plans like 401(k)s and IRAs, potentially adding billions of dollars in U.S. tax revenue each year.

Economists Alicia Munnell and Andrew Biggs argue how subsidies for these retirement plans, which they say fail to “significantly boost national saving,” could be diverted to fund Social Security instead — which is set to run short of cash by 2033.

“It makes little sense to throw more and more taxpayer money at employer plans and IRAs,” the duo wrote in the brief. “In fact, the case is strong for eliminating the current tax expenditures on retirement plans and using the increase in tax revenue to address Social Security’s long-term financing shortfall.”

Americans saving up for their golden years get to defer taxes on contributions to retirement plans, like 401(k)s and IRAs, which they only pay on withdrawals in retirement. But deferring their taxes not only squeezes the future savings they get to enjoy in retirement, it also leaves potential tax revenue on the table.

The brief points to Treasury estimates that the tax preference for employer-sponsored retirement plans and IRAs reduced federal income taxes by about $185 billion in 2020 — equivalent to about 0.9% of gross domestic product.

What’s more, the tax expenditures for retirement savings plans are actually more likely to benefit higher earners. The Tax Policy Center estimates nearly 60% of those benefits went to taxpayers earning at least $167,000 annually, while more than 38% went to those making $245,000 or more in 2020.

Why? Higher earners are more likely to have access to employer-sponsored retirement plans, are more likely to participate in them and contribute more when they do participate, the brief states.

The researchers also calculated, based on Federal Reserve data, that between 1989 and 2022, the share of workers aged 25 to 64 who participate in employer-sponsored retirement plans rose by a meager two percentage points, from 51% to 53%.

Meanwhile, Social Security benefits are a major source of income for low-income seniors, many of whom rely on these checks to cover the cost of essentials. Additional financing would allow the program to continue paying beneficiaries in full for an extended period of time.

Not everyone is convinced by Munnell and Biggs’s proposal to reduce or eliminate tax preferences for retirement plans.

“Talk about robbing Peter to pay Paul,” Brian Graff, CEO of the American Retirement Association, told the National Association of Plan Advisors (NAPA). “It’s absurd to take away the incentives from a system that’s actually working to give money to a system that has fundamental challenges.”

LOL.....The Center's sponsors page is all you need to know about them.....

Sponsors

crr.bc.edu

I mean I think I agree.....We’re just not taxed enough really.

Sales tax, income tax, property tax, vehicle tax, inventory tax, capital gains tax, fuel tax. Yes sir, there’s still some meat left on the bone there.

Here's a much better Idea....Free of charge.....Massively crack down on SS disability and Medicaid.

Economists Alicia Munnell and Andrew Biggs argue how subsidies for these retirement plans, which they say fail to “significantly boost national saving,” could be diverted to fund Social Security instead — which is set to run short of cash by 2033.

Subsidize something, get more of it.
I guess they want to reduce retirement savings.
Fucking useless liberal economists.

The brief points to Treasury estimates that the tax preference for employer-sponsored retirement plans and IRAs reduced federal income taxes by about $185 billion in 2020 — equivalent to about 0.9% of gross domestic product.

That's easy, cut federal spending by $185 billion from 2020 levels.
And next year, cut it by $370 billion from 2020 levels.
Keep going until we make up for all the bad retirement savings back to 1989.

 

[Toddsterpatriot]

The understand they live in a society where one major party licks the boots of rich people. So they are searching for any solution but the obvious one, which GOP bootlickers will not allow.

Exactly! Only rich people are allowed to have 401Ks and IRAs. DURR

 

[marvin martian]

'Talk about robbing Peter to pay Paul': Economists propose axing 401(k), IRA tax benefits to help fund Social Security — but some retirement experts are lashing back

Funding for Social Security is projected to run dry in less than a decade.

finance.yahoo.com

A new brief from the Center for Retirement Research at Boston College makes the case for scrapping tax benefits on retirement plans like 401(k)s and IRAs, potentially adding billions of dollars in U.S. tax revenue each year.

Economists Alicia Munnell and Andrew Biggs argue how subsidies for these retirement plans, which they say fail to “significantly boost national saving,” could be diverted to fund Social Security instead — which is set to run short of cash by 2033.

“It makes little sense to throw more and more taxpayer money at employer plans and IRAs,” the duo wrote in the brief. “In fact, the case is strong for eliminating the current tax expenditures on retirement plans and using the increase in tax revenue to address Social Security’s long-term financing shortfall.”

Americans saving up for their golden years get to defer taxes on contributions to retirement plans, like 401(k)s and IRAs, which they only pay on withdrawals in retirement. But deferring their taxes not only squeezes the future savings they get to enjoy in retirement, it also leaves potential tax revenue on the table.

The brief points to Treasury estimates that the tax preference for employer-sponsored retirement plans and IRAs reduced federal income taxes by about $185 billion in 2020 — equivalent to about 0.9% of gross domestic product.

What’s more, the tax expenditures for retirement savings plans are actually more likely to benefit higher earners. The Tax Policy Center estimates nearly 60% of those benefits went to taxpayers earning at least $167,000 annually, while more than 38% went to those making $245,000 or more in 2020.

Why? Higher earners are more likely to have access to employer-sponsored retirement plans, are more likely to participate in them and contribute more when they do participate, the brief states.

The researchers also calculated, based on Federal Reserve data, that between 1989 and 2022, the share of workers aged 25 to 64 who participate in employer-sponsored retirement plans rose by a meager two percentage points, from 51% to 53%.

Meanwhile, Social Security benefits are a major source of income for low-income seniors, many of whom rely on these checks to cover the cost of essentials. Additional financing would allow the program to continue paying beneficiaries in full for an extended period of time.

Not everyone is convinced by Munnell and Biggs’s proposal to reduce or eliminate tax preferences for retirement plans.

“Talk about robbing Peter to pay Paul,” Brian Graff, CEO of the American Retirement Association, told the National Association of Plan Advisors (NAPA). “It’s absurd to take away the incentives from a system that’s actually working to give money to a system that has fundamental challenges.”

LOL.....The Center's sponsors page is all you need to know about them.....

Sponsors

crr.bc.edu

I mean I think I agree.....We’re just not taxed enough really.

Sales tax, income tax, property tax, vehicle tax, inventory tax, capital gains tax, fuel tax. Yes sir, there’s still some meat left on the bone there.

Here's a much better Idea....Free of charge.....Massively crack down on SS disability and Medicaid.

Broke, white trash leftists are going to love this.

 

[Fort Fun Indiana]

Exactly! Only rich people are allowed to have 401Ks and IRAs. DURR

What a bizarre non sequitur. . I don't think you reed so gud.

 

[Concerned American]

Americans saving up for their golden years get to defer taxes on contributions to retirement plans, like 401(k)s and IRAs, which they only pay on withdrawals in retirement. But deferring their taxes not only squeezes the future savings they get to enjoy in retirement, it also leaves potential tax revenue on the table.

This seems to be a "smoke and mirrors" approach. Granted, if taxes were taken from 401Ks when the money is earned, the gov't would immediately receive the money, but it would reduce future taxes. It basically would turn everything into a Roth IRA. I take issue with the contention that taxes are lost. Taxes are paid on 401s when they are disbursed whether it is by the owner or his progeny.

 

[ThunderKiss1965]

You don't know what a Ponzi scheme is and should probably not comment again until you read up.

Hint: people will never stop being born or working.

You take current investors money to pay dividends to the old investors. The working people are paying for those collecting SS now. Ponzi scheme and it will only get worse the unfunded liability for the next 75 years is 96 trillion dollars.

 

[Fort Fun Indiana]

You take current investors money to pay dividends to the old investors.

I.E., what every single company on the planet does, when it pays dividends or does buybacks. What would make it a ponzi stream is that being their only stream of revenue, with no guaranteed or good expectation of future revenue.

 

[Toddsterpatriot]

What a bizarre non sequitur. . I don't think you reed so gud.

Dems want to axe 401K and IRA tax benefits, but Republicans
don't want to do that, because they lick the boots of the rich.

Was that kinda what you were going for in post #6?
Or were you making some other unrelated point?

 

[Toddsterpatriot]

I.E., what every single company on the planet does, when it pays dividends or does buybacks. What would make it a ponzi stream is that being their only stream of revenue, with no guaranteed or good expectation of future revenue.

Companies have a stream of earnings to pay people who own shares.
The government's stream, interest on the Trust Fund, is about to run out.

 

[Toddsterpatriot]

I.E., what every single company on the planet does, when it pays dividends or does buybacks.

Which companies are selling new shares to pay dividends and buy back old shares?

 

[Fort Fun Indiana]

Dems want to axe 401K and IRA tax benefits, but Republicans
don't want to do that, because they lick the boots of the rich.

Was that kinda what you were going for in post #6?
Or were you making some other unrelated point?

A pile of half truths and lies.


The changes democrats want to those plans are only for the wealthy and large balances.

Democrats want to oncrease the cap for SDS withholding.

Republicans want to privatized it altogether and give rich people a blow job.

 

[Fort Fun Indiana]

Which companies are selling new shares to pay dividends and buy back old shares?

Any company that sells stock and pays dividends and buys back stock. What a silly question.

 

[KissMy]

You take current investors money to pay dividends to the old investors. The working people are paying for those collecting SS now. Ponzi scheme and it will only get worse the unfunded liability for the next 75 years is 96 trillion dollars.

Trump proved government can print money to pay the unfunded liability.