Everyone has heard the old saying, “If it’s not broken, don’t fix it”. Well why is it that our government seems to enjoy making continuous horrible mistakes and always trying to fix things that are not broken. The most recent debacle that we keep hearing about is the government looking into finding ways to tax our hard earned 401(k) plans, annuities, and other tax-deferred vehicles. Folks, this is not something we should take lightly.
As our politicians and government officials continue to spend over a trillion more than they take in while doing nothing but argue about absurd solutions, they are looking for any potential scapegoat to tax, tax, and tax away. Of course, the rich were the first target, and their taxes will surely rise soon. But the next target is even more scary because it involves the vast majority of Americans. It is also a sensitive subject because it deals with retirement income, an area that is already under severe distress due to the lack of proper planning and saving in our country. What is the next tax scapegoat? Our very own defined contribution retirement plans such as 401(k)’s, IRA”s, and even annuities.
A recent study by the Investment Company Institute revealed that there are over $3.5 trillion in IRA’s and $5.1 trillion in 401(k) plans today. Combine that with the few trillion in annuity plans and you can see why the greedy government is salivating like a hungry dog looking at a fresh bone…that is over $10 trillion of fresh money that the government could create new taxes on. So don’t be surprised if you find the hard earned money your 401(k), IRA, or annuity starts getting even smaller due to the government putting their grubby hands in the pile. As this gets closer to fruition, we will all need to come together as concerned citizens and refute and try to rebuke this from happening. I firmly believe that taxes probably need to go up a bit to generate more revenue, but perhaps the next cut-back would be government spending (like denying politicians from spending money on private jets, lifetime pensions, etc) before they make middle America catch the falling knife once again.