There are reasons to not like IRAs. They are effective tax exemptions for capital income, so they benefit them that's got at the expense of those that don't. If you're reconciled to IRAs, however, it's hard to want to deny others easier access. Ideas for universalizing them and kicking in a subsidy to low-income depositors have been floating around, including from the Clintonites. Doubtless they will reappear w/Obama.
The Bush description is an IRA, albeit under a very different arrangement. What was different is that Bush yoked this proposal to a gutting of social insurance, rather than an augmentation of it as per Ghilarducci. If I force you to put your payroll taxes into an IRA and eliminate your SS benefits, that's not the same as requiring you to save more income and spend it later, leaving the payroll tax & SS benefits intact. I should say there was a disturbing sentence from O about a 'conversation' about Social Security. My guess is he is alluding to some kind of incremental split the difference fix that eliminates the long-run shortfall in the program. He proposed one himself in the campaign that everyone seems to have forgotten about, based on an increase in the payroll tax for high-salary workers. The most valid pessimistic interpretation of the speech is that Obama envisions a deal where the SS shortfall is fixed (unnecessarily, IMO) coupled with a new IRA program that leaves people with the same retirement income but less spending money prior to retirement. > This is from a website seeking to explain Bush's measure in 2003. This > sounds exactly like "expanded access to IRAs" to me: > > Retirement Savings Accounts (RSAs) could be used only to build up retirement > savings. RSAs would consolidate traditional IRAs, nondeductible IRAs and > Roth IRAs, each of which has a different set of rules regarding eligibility > and tax treatment, into one streamlined type of account with rules similar > to current law Roth IRAs. Up to $7,500 (in addition to amounts contributed > to an LSA) could be contributed to an RSA annually. While contributions to > RSAs would not be deductible, earnings would accumulate tax free and > distributions after age 58 (or death or disability) would be tax free. > > full: http://usgovinfo.about.com/library/weekly/aataxfree.htm > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
