Socialists, of course, believe that no individual earns money. Everything belongs to the state and is collective. "You didn't build that" because your company couldn't exist without what government supplies. As Elizabeth (Princess Fauxcohontas) Warren put it:
"You built a factory out there? Good for you," she said last year. "But I want to be clear: You moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did."Of course, this wasn't her idea, nor Obama's, and while Legal Insurrection Blog credits the main idea to progressive professor George Lakoff, I'll bet the belief goes back at least as far as Karl Marx.
The world today is abuzz with claims being shot around that are paving the way for confiscation of savings. It's coming, folks.
The European Union's "Competition Forum" is "investigating" whether nations having lower business tax rates amounts to giving businesses subsidies. In other words, allowing them to keep some of what they earn is subsidizing them. In our country, aspects of the tax code that give any break in taxes are being renamed "spending in the tax code". If you're not under double-taxation, you're cheating.
One of their favorite examples to eliminate such "spending" is the IRA. A conventional (non-Roth) IRA allows you to save pre-tax money, under the arrangement that you'll be taxed at regular rates when you withdraw it. Presumably, your tax bracket will be lower, so you'll pay less tax at that time than if you paid taxes on it now. To liberals like Fred Hiatt in the Washington Post, you're getting a benefit they're paying for, not using your own money. It's society's money, not yours. Furthermore, you're greedy if you don't agree with what he says. Writing about Obama's plan to restrict the amount that can be saved for retirement, Hiatt writes:
This spring Obama proposed a cap of about $3.4 million on how much people can save in their tax-advantaged IRAs and 401(k) plans — enough to generate an annual retirement income of about $205,000.So if you don't think that's a reasonable law, you're who's wrong with Washington! But wait, that's not all! In his twisted little mind, because someone is not paying some extra tax - today; they'll pay it eventually - on their earned income, he is somehow paying their way, giving them a helping hand!
The response to that modest proposal, which would raise about $9 billion in tax revenue over 10 years, says a lot about what — and who — is wrong with Washington these days.
But Obama isn’t keeping people from saving as much money as they can or want. The question is how much the rest of us should have to chip in. Obama is suggesting that at some point retirement accounts, invented to encourage working people to set aside enough for their sunset years, no longer need a helping hand from taxpayers.
For the record, his attempt to gather $9 billion over 10 years - $900 million/year - is a rounding error compared to our spending. With a projected deficit this year of $744 Billion, or $2 billion deficit per day his tax revenue doesn't even pay for 11 hours worth of spending. Obama's plan is nothing but punishment for people who can afford to put more than that into a 401k (and equally for the record, my two chances of being taxed under his law are slim and none - but I still think it's bad law).
That's clearly not enough money to make a difference, and central bankers/planners around the world are looking at direct confiscation of savings. Of course, they can't say that in so many words, so they refer to "haircuts" or "negative interest rates", and while that article is about the EU, our own Janet Yellen has advocated negative interest rates in the past. Marc Faber has said that Yellen will make Bernanke look like a restrained-spending kind of guy; a fiscal hawk...
In 2010 she said if she could vote for negative interest rate, in other words you have a deposit with the bank at $100,000 at the beginning of the year and in the end you would only get $95,000 back, that she would be voting for that.As if the inflation they're trying to create isn't a bad enough tax on savings, she wants to actually take money out of your account. It's not like they don't realize this is going to hurt savings, they want to discourage savings, because in their models, money being spent is better than money being saved or invested.
While I find that every coworker I've spoken with this sees this coming, there's some differences in how we think we should respond. A while back, Ann Barnhardt said to simply get out of the game. Take the tax penalty and get out of your 401k. Regular savings or other places you can put your money are less likely to be targeted. While I can't fault that, I stay in my 401k because my company gives me 6% more pay in matching funds while I'm in it. I'm not ready to turn down "free" money. Of course, I think the timeless advice about "beans, bullets, bullion and band-aids" is golden; there's wisdom in the view that if it's not in your possession or some place you can defend it, you don't own it. I have friends who are talking about buying real estate or second places to live, or adding on to their houses. I may be naive, but I think your primary residence is safer than a second home if confiscation starts. A move to start taking everyone's primary residence would absolutely start the next civil war.