Serenity wrote:How about money that people designate for retirement not be taxed ever
actually there's some rationale behind that.
What little i remember of economics class was this:::
Savings in the bank allows economy to grow because of "multiplication of money".
For every dollar on deposit the bank can loan out five or ten, because it's unlikely all the savers will want their money at the same time. Those five or ten dollar loans allow entrepreneurs like Shap to run small businesses, allow us working folks to finance a house, etc and the interest on those five or ten loans covers the interest on the original dollar plus the bank's expenses.
I have to keep it that simple. I confuse easy.
That's why economists complain about the low rate of personal savings in the USA.
It makes us scramble for money to "multiply".'
That was the genius of the 401 law, it caused a lot of saving.
Instead of in the bank it was saved in Wall Street, but you get the idea.
If Joe the Plumber wants to live frugally and save a ton of money in the bank it's good for the economy. His savings, through multiplication of money, finances lots of projects. And by putting his money in the bank he is placing no demands on the economy for luxury goods .
Why not let him keep it there? Tax him when he spends it.
Same goes for Warren Buffet.
That's the attraction of replacing the income tax with a flat expenditure tax.
It's from each according to his ability (and inclination) to spend.
And a lot of tax lawyers will have to find honest work.
Probably ought to tax Wall Street transactions too, after all it's just a casino.
We might become a nation of Henry Thoreau's. I can think of worse things.
PS re "that Ghilarducci article"
More careful perusal of it revealed this phrase:
Accumulations in 401(k) plans and other retirement plans that exist
before the bill goes into effect will be treated under the
old tax rules.
Makes me think the references to "confiscation" may be spin by an overzealous reporter.
Sorry, folks, they had me really going for a while.