What President Barack Obama has planned in his upcoming budget, while not exactly a Cypriot-style, government-based raid on private savings accounts, comes too close for comfort. As widely reported Monday, the Obama budget document – which is already a month late – will include a new proposal to limit the total amount an individual can put aside in tax deferred retirement savings like 401Ks and IRAs to an amount sufficient to generate an annual income in the golden years of less than $250,000 per year.
Why do it? According to a senior administration official, The Hill reported, "wealthy taxpayers can currently 'accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.'"
Who says? It is true that some people use retirement savings plans as a form of tax avoidance, but tax avoidance was, the last time anyone checked, still legal. Major corporations that have the imprimatur of approval from the Obama administration like General Electric and General Motors do it all the time.
What the White House may propose is not a matter of fairness, as the president and his allies are sure to cast it, but one that strikes at the heart of the right to keep for ourselves the product of our hard work.
To Obama, that idea that some may have saved more than others for their retirement is unfair, So is the idea, apparently, that some people make more than others. It's class envy at its most ugly, designed to appeal to the more than 40 percent of Americans who pay no income tax and who voted for the president in 2012.
It is not a legitimate function of government to determine when a person has saved enough for retirement. "Enough" is a nebulous word just like "rich." If a cap is in the offing in the near term, can confiscation, a la Cyprus, be far behind?
What Washington should be doing is encouraging people to save more for the future rather than less, and promoting the idea that people should do their own planning for their own future rather than relying on government to provide it for them.
The savings rate in the United States is already the lowest of any industrialized country in the world. The president's plan will only make that worse and drive people away from defined contribution retirement plans back into defined benefit plans of the sort that threaten to bankrupt California, New York, Illinois and other blue states. Instead, the budget bureaucrats that infest the White House these days are looking around for large piles of money that, in their view, are under-taxed so that the taxes on them can be raised in order to meet their objective of taking the tax burden to 25 percent of U.S. GDP.
The social welfare state that Obama seeks is defined by an insatiable appetite for more revenue. Obamacare is expensive. The infrastructure trust fund he wants to establish is expensive. His whole agenda, as evidenced by the last four years, is expensive – more expensive than America can afford, now and into the future.
Not to put too fine a timely point on it, but Obama wants to remake America into what Britain was before Margaret Thatcher arrived on the scene: A nearly-bankrupt former global superpower whose best days were apparently behind it. Too bad he didn't make that clear during the last presidential campaign, but, if he had, the results would have most assuredly been different.