Congress mulling 401(k) changes

[RoyalShock]

http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20081007/REG/810079894

This was suggested by the chairman of the House Committee on Education and Labor.

“With respect to the 401(k), it appears to be a plan that is not really well-devised for the changes in the market,” Rep. George Miller, D-Calif., said.

“We’ve invested $80 billion into subsidizing this activity,” he said, referring to tax breaks allowed for 401(k) contributions and savings.

Read between the lines.

It's not your money. It's the government's money and they are just letting you keep some of it. Someone slap that guy and then tell him that they haven't "subsidized" a measely dime to the 401(k) program.

[rrshock]

I already thought that 401K contributions were pre-tax anyways. At least 15-18% or something like that.

[RoyalShock]

401(k) contributions are pre-tax. But they are taxed once the money is payed out. My point is that this particular Democrat views the tax you aren't paying yet as a subsidy.

How can a politician call money you don't yet owe a subsidy? Because in his mind, it's his money that he is just gracious enough to let you keep for now.

[Maggie]

401(k) contributions are pre-tax. But they are taxed once the money is payed out. My point is that this particular Democrat views the tax you aren't paying yet as a subsidy.

How can a politician call money you don't yet owe a subsidy? Because in his mind, it's his money that he is just gracious enough to let you keep for now.

This is what is in store in the country.

[Ixiah]

How can a politician call money you don't yet owe a subsidy? Because in his mind, it's his money that he is just gracious enough to let you keep for now.

RS - You might want to pick up a tax textbook sometime (being serious here) because when I took my classes out at WSU it was really interesting and some tax code is flat out odd. For example:

An illegal activity dealing with drugs cant take a tax deduction on any business expenses except cost of goods sold (the drugs)!

If a credit card company allows you to pay less (lets say you owe $2000 but they only require you to pay $1500) then that extra is income and taxable.

I digress, essentially the law says EVERYTHING (as in all income) is taxed! Then the tax law carves out exceptions - now you know why the thing is so big. So by the literal interpretation - he is correct.

[Smooth007]

How can a politician call money you don't yet owe a subsidy? Because in his mind, it's his money that he is just gracious enough to let you keep for now.

RS - You might want to pick up a tax textbook sometime (being serious here) because when I took my classes out at WSU it was really interesting and some tax code is flat out odd. For example:

An illegal activity dealing with drugs cant take a tax deduction on any business expenses except cost of goods sold (the drugs)!

If a credit card company allows you to pay less (lets say you owe $2000 but they only require you to pay $1500) then that extra is income and taxable.

I digress, essentially the law says EVERYTHING (as in all income) is taxed! Then the tax law carves out exceptions - now you know why the thing is so big. So by the literal interpretation - he is correct.

You sound like you had Dr. A for 430.

[Ixiah]

I had Montgomery for 430 - was one of only 3 'A's in Monty's class the semester I took it :).

I'm familiar with Dr. A though as he was the only one teaching 630 when I took it. He was brutal - I remember looking on blackboard after the final and the class average was something like 61%. That is pretty amazing because at that level the weeding out process is done and the people left are all good students. I managed to get a B out of it with barely 80% and counted myself very fortunate.

[InWuWeTrust]

i love my roth-401k!

[BostonWu]

i love my roth-401k!

Here Here! I just switched over. I'm willing to bet I'll be in a higher tax bracket 30 years from now.