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The Democrats Want Your 401(k)

BEGIN TRANSCRIPT

RUSH: George Miller, who runs a congressional committee, Democrat in California, came out with the first notion of just getting rid of your being able to deduct for your income your contribution to your 401(k), that the government is "losing" $80 billion and we can't afford lose that so they want to take that away. Then they had a hearing last week where a professor from the New School for Social Research, a professor of economics, Teresa Ghilarducci, she appeared and said: I've got a better plan. What we want to do, we want to take your 401(k) at its August level, before the crash. We'll give you that equivalent and put it in your Social Security account, essentially, and we're going to invest that money that we take from your retirement account, your 401(k), at its August level. We're going to buy government bonds with it, which will guarantee you 3% -- and then we will require that you put 5% of your pay into your 401(k) although it's not yours anymore. The government owns it. They will manage it. They will take care of it, and then when your retirement day comes you'll get your Social Security check and part of your check will be whatever your 401(k) monthly payout is, after 3% of growth every year under the stewardship of the government. So I mentioned this on Greta's show.

Yesterday in Seattle, Kirby Wilbur had this exchange with her. She said, "Your plan, as I understand it, would end the tax deferral status of 401(k)s. I have one, and I put in a certain amount every month and that deducted from my growth so I don't pay taxes on it 'til I pull it out when I retire. So it would end that and it would bring about a new government retirement plan. Is that correct?"

GHILARDUCCI: Not quite.

WILBUR: Okay.

GHILARDUCCI: You know, Rush Limbaugh said that's what it was.

WILBUR: Okay.

GHILARDUCCI: Whatever you have in your 401(k) now will keep its tax break. So everybody who has their 401(k) plan will be grandfathered in. But what I proposed, instead of getting a tax deduction -- like a decrease in your taxes by whatever your tax rate is, so if you're at the very high income, your tax rate is 39%, and if you're at the very low, you're at 15%, and 40 million people make so little they don't pay any taxes at all. Instead of the deduction coming from your tax rate, so if you're high, whatever you put in your 401(k), like a dollar, let's say, or a hundred dollars, you get back 39 cents, or $39, if you're the high rate; 15 dollars, or 15 cents if you're at the low rate, or nothing if you're at the low rate. I proposed that we just transfer the deduction to a credit so that everybody gets $600. So I'm not taking away the tax break. I'm actually, um, giving everybody a flat amount so that it's more equal.

RUSH: (laughing) Where am I wrong about this? Everybody is going to get...? Socialism. Everybody is equal now, whether you've got a 39% tax rate and you can deduct that amount, you get that equivalent deduction. This is all gobbledygook. Basically I'm just going to give everybody 600 bucks and you give me your IRA, and I'm going to buy government bonds with it at 3% a year. I'll just give you 600 bucks and that's how we'll take care of this. So Kirby says, "Now, wait, there will be a new plan. All of us who bring in a paycheck will put 5% of our income into a retirement plan administered by Social Security -- guided by the pension folks who do Congress and the Federal Reserve and then you're gonna guarantee at least a 3% return. The government would supplement that with $600 annual payment to the plan?"

GHILARDUCCI: The government would guarantee 3% plus inflation.

WILBUR: Okay, 3%, okay, plus inflation.

GHILARDUCCI: Yes.

WILBUR: So the bonds would be adjusted. As I understand the $600 would be adjusted as well, right?

GHILARDUCCI: It would. It would.

WILBUR: Okay.

GHILARDUCCI: And what's amazing about this is that it's actually, um, doesn't cost the government anybody. (sic) I'm just rearranging the tax breaks that are available now for 401(k)s and spreading -- spreading the wealth.

RUSH: Spreading the wealth! Her proposal... Now, this is not Obama's yet. This is George Miller's idea. This is the Democrats in Congress. This is why I say, "McCain has gotta tie Obama to these people." Obama will go for this. She's taking your 401(k) and giving you $600 a year and 3% interest -- and the Social Security Administration administers it, and you can put 5% a year into it.

BREAK TRANSCRIPT

RUSH: I want to go back and play the last sound bite here with Teresa Ghilarducci, who is a professor of economics at the New School for Social Research, and she testified before a House committee, Democrat committee last week on how she thinks the government should basically take your 401(k) and administer it, take it away from you. That's bad enough, but it is worse than that, because she says "spread the wealth around." What that means is spread your wealth, your wealth. So let's say you have a 401(k), and I'm just going to use an arbitrary number, your 401(k) right now has assets in it of $50,000, somebody else has assets of $30,000, she doesn't think that's fair to the person that has 30,000. So rather than you get a tax subsidy based on your 39% tax bracket, she's going to give you and the person with an IRA of 30,000, 600 bucks and call it even, a year, plus invest the value of your IRA at 3% adjusted for inflation and then pay you back when you retire. You'll get one check, it will say Social Security Administration. Your 401(k) is gone. The max you can contribute to it under her plan every year would be 5%. It's gone. Kaput. Now, this is not Obama's plan, I want to stress. This is the Democrats in Congress. This is what they want to do. I don't care if they're Obama or if they're George Miller, Barney Frank, liberals are liberals, socialists are socialists. Now, you listen to Teresa Ghilarducci here again as Kirby Wilbur in Seattle tries to understand this. He says, "You're gonna supplement this with this $600 annual payment that everybody with a 401(k) is gonna get."

GHILARDUCCI: The government would guarantee 3% plus inflation.

WILBUR: Okay, 3%, okay, plus inflation.

GHILARDUCCI: Yes.

WILBUR: So the bonds would be adjusted. As I understand the $600 would be adjusted as well, right?

GHILARDUCCI: It would. It would.

WILBUR: Okay.

GHILARDUCCI: And what's amazing about this is that it's actually, um, doesn't cost the government anybody. (sic) I'm just rearranging the tax breaks that are available now for 401(k)s and spreading -- spreading the wealth.

RUSH: Spreading your wealth. But did you also notice the amazing thing is it doesn't cost the government any money! It doesn't cost the precious government any money! It's gonna cost you money. Here's the lure, and folks, you gotta understand this. Gosh, this so infuriates me. Imagine you're just a little guppy swimming around in your aquarium and this woman throws in a little lure to try to feed you and get you hooked, your 401(k)'s tanked. She can wipe that out. Her plan is for the government to restore the value of your 401(k) before the crash hit. That's the sweetener, that's what's supposed to suck you in, that's what's supposed to get you to support this. "Wow! Wowie! You mean my benevolent government that loves me is going to restore my 401(k) value? And then they're going to invest it with bonds at 3% a year plus --" that's how they want you to give it up. They are the ones that came up with this plan. The 401(k)s, SEP/Keoghs and so forth during the Reagan years. They don't like it. They do not like you having control over the creation of your own wealth, folks.

If you want to understand what redistribution is, socialism, whatever you want to call it, it's very simple. The Obamas of the world do not want you in control of your ability to amass wealth. They don't want you to have control over that. They want you to cede your wealth to them for restoring your 401(k) to its August levels, its values, and then 600 bucks a year, yeah, 3%, adjusted for inflation. No growth. Zippo growth. Do you understand, 3% adjusted for inflation, zero growth. They're promising you that your 401(k) will stay even with inflation, but that's it. The arrogance, it doesn't begin to describe it, Snerdley. Of course they're arrogant. I just want to do this and I want to take this tax, and I want to do that, and here's what I want to do, and it's amazing, it doesn't cost the government any money. Well, holy hell. It doesn't cost the government any money. What are we supposed to do, get down and pray to Washington every day four times a day? It's not Washington's money in the first place, Ms. Ghilarducci.

END TRANSCRIPT

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