The San Diego Union-Tribune Reduced 401(k) tax benefits column
NO: In fact it should be increased. Any reasonable policy that encourages Americans to start saving now for their future should be encouraged. Too many young and middle-aged people think they will save in the future or
NO: If the focus of tax reform is simply rearranging winners and losers without addressing over-spending, the net effect on the general economy is nothing positive at all. "Tax reform" by simply reshuffling the tax code to look like a cut without actually reducing tax revenues or lessening the tax burden is a fallacy. Gaming the system by cutting some taxes while raising others obscures the fact taxes are too high and should be reduced.
NO: The primary motivation for reducing the deductibility is to allow the government to collect tax revenue earlier and offset the impact of reducing corporate tax rates. However, if individuals contributing into 401(k) retirement accounts receive a smaller upfront tax deduction, some will choose to save less. Given the low savings rate in the
NO: A shocking 45 percent of Americans have no retirement savings. Defined benefit programs have all but disappeared, leaving 401(k) programs as the preferred employer-based option. Reducing individual retirement deductions to fund corporate tax cuts would translate to future social service expenses. I strongly believe in individual responsibility and financial self-reliance; programs that encourage retirement savings should be made more readily available not less. Deficit-increasing tax cuts should not be mitigated by retirement deduction legislation.
NO: The savings rate in this country is really low, and most Americans don't have enough saved for retirement. According to the Government Accountability Office, the estimated median amount of savings for someone in their 60s is
YES: The 401(k) plans were intended to encourage more saving. But most studies have found they have little actual effect on the overall level of saving, and simply give a tax break to some households without serving a broader public purpose. The goal of tax reform should be to lower marginal tax rates without making the deficit worse. Achieving that will require putting caps on many of the popular deductions.
NO: It is the entitlement programs which need to be targeted through a phased approach. There just is no way of getting around it. Has to be done sooner or later. Discouraging savings is bad for America.
NO: Sixty-two million Americans have 401(k)s -- one-third of the adult population. We should encourage savings and less dependency on government for retirement, which is what such plans do.
NO: Many Americans already do not have enough savings in place for retirement. We should be incentivizing them to save money for their retirement, not discouraging them by lowering the 401(k) pretax contribution cap to
NO: Our policies should encourage citizens to save money for retirement. The 401(k) deduction is targeted at the middle class, encouraging us to save enough money for our cost of living, homes, and medical expenses into retirement. Eliminating these tax deductions may seem to be a short-term budget stopgap, but an aging population with inadequate savings will quickly over-burden our social systems. Help people make better decisions and keep the tax break.
NO: While it might be argued that the growth spurred by upper-bracket tax cuts is worth reducing the amount Americans can save in their 401(k) accounts, it would be a bad idea. To accomplish any real reform, lawmakers will have to make hard decisions. In states where people use the deduction heavily, such as
NO: Most individuals are not saving enough today for retirement. This shortfall is only likely to increase as lifespans lengthen and health-care costs rise. Reducing the amount that an employee could contribute to a 401(k) would decrease saving even more. It would lessen the opportunity for younger individuals to begin building their wealth and widen future income inequality. While boosting spending in the short-run, it will hurt it in the long-run along with the well-being of older Americans.
NO: Although it was not intended to replace defined benefit plans, the 401(k) has become the primary vehicle for employees to save for retirement. Many companies match some portion of the contributions to the 401(k) of their employees. As long as fees are low and investment alternatives provided by the plan are plentiful, the 401(k) is a good retirement planning device and should not be reduced in favor of tax cuts.
NO: Taxing contributions into 401(k) retirement plans will make it even more difficult for individuals to save enough for retirement. According to a report from the
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