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Bush* to propose tax-free "lifetime savings accounts"?

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Philosophy Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 07:19 PM
Original message
Bush* to propose tax-free "lifetime savings accounts"?
From:

http://www.msnbc.msn.com/id/3979217/

"Bush also is considering whether to renew his push for lifetime savings accounts that could be used for any purpose, with tax-free withdrawals,...Yearly contributions would likely be capped at $7,500."

What stops people from depositing the money into an account and then withdrawing it "for any purpose" five seconds later? How exactly is the different from a $90,000 tax deduction for rich people?
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lovedems Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 07:26 PM
Response to Original message
1. Who has a savings account?
With so many people unemployed, THAT'S REALLY GOING TO HELP ALOT! I saw on PBS tonight that the administration was considering a temporary stop on payroll tax. With so many people unemployed, THAT'S REALLY GOING TO HELP ALOT! How's this for an idea...Extend the federal unemployment jerk!
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baldguy Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 07:30 PM
Response to Original message
2. An ADDITIONAL $90k tax deduction for the rich.
I can see it now: direct deposit salery into tax-free account, wile withdrawing from last-years accout - again tax free.
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YNGW Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 08:26 PM
Response to Reply #2
8. The cap would be $7500
Just pointing out that you couldn't continue to put money into the account and expect it to be tax free, only the first $7500 per year.

Not enough info in the article to make an informed decision.

Does tax-free mean you didn't have to pay FICA, etc... on the money?? If so that's 7.65% you didn't have to pay in on that income, or a total of $573.75/yr.
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WhoCountsTheVotes Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 08:38 PM
Response to Reply #8
10. next step - privatize Social Security
Wall Street wants its cut. I bet half the Democrats support it too.
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Fla_Democrat Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 07:33 PM
Response to Original message
3. What stops them?
Edited on Fri Jan-16-04 07:35 PM by Fla_Democrat
Actually nothing, but what's the use? To get five seconds of interest tax-free?


Clip..
"Bush also is considering whether to renew his push for lifetime savings accounts that could be used for any purpose, with tax-free withdrawals, and for retirement savings accounts in which money could not be withdrawn tax-free until the accountholder reached a set age.

As originally proposed last year, contributions to the accounts would not be tax-deductible. Yearly contributions would likely be capped at $7,500.


Lot of info left out in that "..." edit.


Edit: Still not use to Spell Checker.
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Philosophy Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 08:03 PM
Response to Reply #3
5. Perhaps I misunderstood
So the tax-free part is only on the profits made by the investment of the money in the account? Unlike a regular retirement account in which deposits are deductable? I read this to mean that Bush* was proposing changing the tax-free status of the account from the way it was proposed last year so it works just like a retirement account, except you can withdraw money at any time. Maybe I got too excited.

But if only the capital gains are tax free, then it is even more skewed toward only being able to be used by the rich.
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Fla_Democrat Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 08:14 PM
Response to Reply #5
7. Like the Roth IRA?
I have one, and I am not rich by any stretch. Same idea, money going into the account is after tax money, gains are tax free.

Perhaps I have it wrong, but it seems to me that this is not a bad idea. For a younger person, it is great.
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Silverhair Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 08:37 PM
Response to Reply #5
9. It is a good idea. It rewards savings by the "little people,"
unless you think savings is a bad idea. Just because it came from Bush doesn't automatically make it bad. Even a stopped clock is right twice a day.
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ClintonTyree Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 08:02 PM
Response to Original message
4. Just another give away............
to the affluent. Those that got, gets. The credo of the right wing.
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Cleita Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 08:06 PM
Response to Original message
6. It's to privatize SS and eventually eliminate it.
We already have tax free savings accounts. They are known as IRA's and should be part of your retirement planning along with SS not instead of. This clown and the circus he arrived with have got to leave town.
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Silverhair Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 08:40 PM
Response to Reply #6
11. IRA celings need to be greatly raised.
When they were first started the cap on an IRA was $2,000.00. I haven't kept close track of it, but I don't think it has gone up much since then. Inflation has seriously eaten away at the usefullness of that level of savings.

Also, an IRA can't be used for other emergencies. You could use this for your kid's college fund, or other important things. Not too many people are going to dip into an important savings account for something trivial.
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WhoCountsTheVotes Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 08:45 PM
Response to Reply #11
12. Rich people can WAIT IN LINE
Edited on Fri Jan-16-04 08:45 PM by WhoCountsTheVotes
The vast majority of Americans can't afford to save $2,000 a year anyway. There are many things we need to do as a society before we raise the amount of money yuppies can save tax free.

On edit: I think the cap is over $3,000 now anyway.
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Silverhair Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 08:59 PM
Response to Reply #12
14. So if you're frugal enough to have an IRA, you should be punished?
A person can also put less than the cap in an IRA if that's all they can afford. But you seem to think that a person that is frugal and saves is somehow evil and should have their savings taxed away.
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WhoCountsTheVotes Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 09:59 PM
Response to Reply #14
17. what are you talking about?
If you're frugal, and save money, good for you. Did I say anyone was evil?
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Cleita Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 09:29 PM
Response to Reply #12
15. Well, you do eventually get taxed on it when you use it.
eom
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Cleita Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 08:46 PM
Response to Reply #11
13. Your SS deduction can't be used for emergency funds either.
IRA ceilings should be raised but SS shouldn't be used like an IRA. It's a different animal altogether. Quite honestly my IRA as retirement isn't anywhere near as important to me anymore after ten years as my SS. With interest rates so low, I hardly get any income from it at all, not like the 9% I received when first retired. Yes, I also had growth besides income and have pretty much kissed that goodby thanks to the Bush economy.
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camero Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 09:54 PM
Response to Original message
16. These are diversions
Edited on Fri Jan-16-04 10:05 PM by camero
As far as Bush is concerned, we don't need social programs. We need "savings accounts". It all ties in to the "personal responsibility" that RWers tell us so much about.

Instead of Medicare and Medicaid, we get "health care savings accounts".

Instead of college aid, we get "Pre-paid Tuition Accounts".

Instead of Social Security, we get "Roth IRAs" and so forth.

It's just one more step in the privatization scheme.
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TheDalaiMama Donating Member (159 posts) Send PM | Profile | Ignore Fri Jan-16-04 10:13 PM
Response to Reply #16
18. "When" and "If" I find job..I will take advantage of that progam.
dalai
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camero Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 10:30 PM
Response to Reply #18
19. I don't really buy these schemes even when I'm well enough to work
Face it. My taxes aren't going to go down. But the top 1% taxes will.

All these "accounts" get put in an interest bearing fund with interest. But the brokers or feduciaries that oversee the programs get to lop off interest and "fees".

Plus there are so many accounts for so many different things that if you took them all, you wouldn't see much of a paycheck.

Which is exactly what they want. One more reason to take your money.
Talk about being nickeled and dimed. After all the financial scandals, it's a wonder anyone falls for these schemes.
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LizW Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-16-04 10:36 PM
Response to Original message
20. I swear to god
these people must spend every waking minute thinking of new ways the rich can hoard more and more wealth without paying any taxes.
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