The President's Plan To Limit IRAs and 401k Plans

In what should come as no surprise to anyone, the President's budget proposal, as leaked by a White House Spokesman, aims to cap the tax-sheltered Individual Retirement Accounts.

President Obama’s budget, to be released next week, will limit how much wealthy individuals – like Mitt Romney – can keep in IRAs and other retirement accounts.

The reference to Mitt  Romney is from The Hill's article, not the spokesman, because the Hill is a Liberal/Progressive site.  Using Romney's name is a "dog whistle" to draw the attention of the 50% who don't pay tax.  It's saying people that rich don't deserve to put money in tax-sheltered retirement accounts.  Rewording that slightly, it's saying in the name of fairness, we need to treat them differently than lower income people.  Excuse me?  Doesn't fairness mean treating everyone the same?

The senior administration official said that wealthy taxpayers can currently “accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.”

Under the plan, a taxpayer’s tax-preferred retirement account, like an IRA, could not finance more than $205,000 per year of retirement – or right around $3 million this year.

Plus, they get to decide what a reasonable retirement income is.  $205,000, just like their level at which people need to get taxed for making too much. 

Newsflash: if you think this will end at the equivalent of $205,000 per year, I have some land to sell you.  The plan is to eliminate these accounts. In September of 2012,  2 1/2 years ago, I wrote: 

Barney Frank and others have publicly said they want to eliminate 401k plans because only "rich people" use them.  Second, there's about $10 trillion in those accounts, and they need that money like a crack whore needs her fix.

Because that's what it's about: getting every last penny of money they can take as taxes before they venture to outright confiscation.  The line between taxation and confiscation is going to get pushed and stretched until we don't recognize it.   

Simple rule for troubled times: if you can't control it, you don't own it.