House Democrats Contemplate Abolishing 401(k) Tax Breaks

Stupid is as Stupid Does

This is the kind of idiotic ideas we can count on from a Democratic controlled House, Senate and President.

“From where I sit that’s just crazy,” said John Belluardo, president of Stewardship Financial Services Inc. in Tarrytown, New York. “A lot of people contribute to their 401(k)s because of the match of the employer,” he said. Belluardo’s firm does not manage assets directly.

Higher-income employers provide matching funds to employee plans so that they can qualify for tax benefits for their own defined-contribution plans, he said.

“If the tax deferral goes away, the employers have no reason to do the matches, which primarily help people in the lower income brackets,” Belluardo said.

Say goodbye to all those employer matched dollars you are used to seeing. If there are no tax breaks for then to do so, they will eliminate it. And if you think the government can handle this better than a free market, then you and I have a major disagreement my friend.

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~ by thedark2 on October 23, 2008.

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