One of the great things about writing for a blog is that I get to see various statistics about my past posts. One thing I find interesting is how some people find my posts. From looking at this data, I can see that Google searches about 401k and IRA confiscation are becoming more common. It is a real concern for many Americans now, and even more so after the Cyprus banking debacle. Virtually no assets are safe anymore.
So should we worry about the government trying to confiscate retirement accounts? I have written about this before. I definitely think the government will try. And it is not just Obama or the Democrats. I think it will be tried by almost any politician who thinks it can be done. The bigger question is whether the government will succeed.
Obama is releasing his proposed budget this week. I’m not sure how seriously it should be taken, but he is firing a shot across our bow. A piece of his proposal involves limiting retirement accounts.
(By the way, I am not sure how something like this is part of a “budget”. Isn’t a budget about what is going to be spent? I guess Obama considers 401k and IRA contributions as government spending because it is depriving the government of money. It is scary that this is how these politicians think.)
I don’t know the details of Obama’s proposal yet. If it is something more interesting than what I think, maybe I will write more about it. But for now, Obama and his minions are saying that $3,000,000 in retirement is enough. As if he should decide what “enough” is.
Does this mean that people will not be able to contribute more once it hits this amount? Does it mean that the account is not allowed to grow anymore? You will already pay taxes on this money when it is taken out, unless it is a Roth IRA. Will there be an additional tax on anything over 3 million dollars?
Regardless of what the proposal is, this is a first step. They are trying to get their foot in the door by playing class warfare with something that seems fairly harmless.
But this is like every other government program. It is putting the frog into a pot of water and turning up the heat slowly. You don’t throw the frog into a boiling pot or he will jump out. We see this with gun control. The government is always trying to take seemingly modest steps like banning certain weapons or expanding background checks. It is a slow progression to get where they want.
I think this is what we have to watch out for. The government will not just sweep in and announce that it is taking a percentage of everyone’s retirement portfolio. It will be done in much subtler ways. It will be done in baby steps. Obama is trying to take a baby step with his proposal. We need to call everyone’s attention to what he is doing and the tactic he is using.
The income tax was put into effect in 1913 with the argument that it would only be a small tax on high income earners. Within a few short years, it was high rates hitting the middle class. We must draw a line in the sand at the beginning. We can start by speaking loudly against any government proposal to go after retirement accounts.