Biden Lie About Tax Hikes On Middle Class (401k Change)

[Kriegsspiel]

Outside of the 401k stuff, which does look like it would suck if Biden gets elected, I like to see some early retirement/going Galt talk! Although it is awesome, you *could* just earn enough income to come in under the taxable limit. It should be easy for you, aren't you an independent contractor?

In 2021, You can save $9,600 in an HSA and traditional IRA (then use the retirement savings credit). If you combine those with the $12,550 standard deduction, or run your business fatter and deduct more business expenses, you can earn up to $22,100 with no federal taxes, depending on how much you're making from investments.

[pp4me]

My wife's retirement plan has a Roth option which she's never used. If this plan is put in effect it sounds to me like it would be better to switch the entire contribution to Roth, assuming they still allow us to do that.

[doodle]

Seems fine to me. Whether it's mortgage interest deductions or 401k tax benefits these tax policies and many other...LLC expense deductions etc....mostly benefit the rich. From my perspective this is a proposal to bring more equality to these benefits.

[WiseOne]

Depends on what exactly gets passed, but sounds like if you expect to be in a 20%+ bracket for 401K withdrawals in retirement then you would be pretty obviously better off with the Roth option.

That will however not be the only tax on the middle class. The increase in corporate income taxes will impact the wage increases that people have enjoyed for the past few years. Likely there will be a return to the wage stagnation that was previously the rule. Also stock market returns will drop, which will reduce the growth of the 401Ks that the middle class is increasingly relying on for a secure retirement.

There's a lot more, too. Biden apparently wants to take California's ban on independent contracting work to the national level. That will destroy the gig economy and remove an important source of temporary or additional income for many people, also the ability for people dealing with child care or similar issues to set themselves up with a flexible work schedule. Net will be a lot of lost income to the middle class, and of course higher expenses too since those gig economy companies will have to charge more for their services.

I could probably go on for pages, but I think you get the idea. One thing is for sure, if Biden wins and the Senate goes Democrat, the results will shock the economy and the voters to such an extent that the Republicans will regain power hopefully as soon as the first midterm election and almost certainly with the next Presidential election.

[doodle]

Depends on what exactly gets passed, but sounds like if you expect to be in a 20%+ bracket for 401K withdrawals in retirement then you would be pretty obviously better off with the Roth option.

That will however not be the only tax on the middle class. The increase in corporate income taxes will impact the wage increases that people have enjoyed for the past few years. Likely there will be a return to the wage stagnation that was previously the rule. Also stock market returns will drop, which will reduce the growth of the 401Ks that the middle class is increasingly relying on for a secure retirement.

There's a lot more, too. Biden apparently wants to take California's ban on independent contracting work to the national level. That will destroy the gig economy and remove an important source of temporary or additional income for many people, also the ability for people dealing with child care or similar issues to set themselves up with a flexible work schedule. Net will be a lot of lost income to the middle class.

I could probably go on for pages, but I think you get the idea. One thing is for sure, if Biden wins and the Senate goes Democrat, the results will shock the economy and the voters to such an extent that the Republicans will regain power hopefully as soon as the first midterm election and almost certainly with the next Presidential election.

With any change there will be winners and losers. Perhaps under further scrutiny some of these proposals will be walked back. Steps must be taken to address growing divide at some point. That is complicated process but I feel necessary if we have any hope of maintaining social cohesiveness among classes. The natural trend towards greater and greater inequality is a difficult issue to deal with as it does require meddling with the free market (although I'd argue that the government has been doing this with many policies that favor of the wealthy for a while now already). Maybe some on this board would argue that a world where 1% of the population owns 99% percent of the wealth is completely fine...i'd argue that we would cease to have a country one would want to live in at that point. What is the correct balance....I don't know, but I don't think it's where we are at right now.

[doodle]

I also believe that we have long been ignoring the ecological impact of our present economy as well. I don't know how much longer than can continue. This is a factor that will also have a greater and greater impact on our lives moving forward.

[doodle]

I do understand where Tom is coming from though. I benefitted greatly from 457 and 403 retirement plan options that allowed me to deduct an enormous amount of income. Was that fair? Nope. Our system kind of sucks in that way.