VideoStephen Taub, CFO.com | US
December 8, 2008
- IRS 401k
When the little known IRS rule 401k was found by an accountant in 1979, who would have thought about the seismic shift it would cause in the destruction of the middle class.
Corporations at the time paid nearly 49% of all income taxes and sought ways to shift the tax burden to employees.
Yep, employees where fat and happy then, having pensions paid for life upon retiring after 30 years with a company. Then they got nice juicy SSI checks and for those who did real planning an ADDITIONAL 401k SUPPLEMENT.
It was called the 3 legged stool.
Well corporations not only cut one leg off they have been sawing another leg in 1/2 by NOT funding retirements and letting employees, who neither understand or comprehend RISK of stocks, manage their own retirements. To top it off corporations no longer had to FUND these either.
1st they shipped jobs out of the country in droves as the behest of congress and then cut the wages of those who remained.
Fat and happy, that is what corporations are now in the executive suite!!
They got their stock options, expense accounts, golden parachutes and SEPERATE retirement accounts, you know the old fashioned PENSIONS.
Of course the worker bees don't get this, no siree!!
They get pink slips at the drop of a hat, wage cuts, no matching 401k, NOTHING.
Corporations on the other hand get CHEAP taxes, tax breaks and anything else their lobbyist can toss into legislation.
Today corporations pay LESS THAN 19% of income taxes and complain heavily that they are over taxed.
I for one believe they are SO UNDER TAXED that we need a seismic shift back to right the ship.
1st off I would impose a tax equalization - retroactive to 1980's - whereby any jobs shipped out of the country would be subject to a tax equal to say 50% of the cost savings for shipping those jobs elsewhere. This could be used to retrain and fund lost pensions and ANYTHING ELSE CONGRESS WANTS. I need to throw congress a bone you know.
2nd if you do tax planning and figuratively move your headquarters out of the US then 2 things happen.
a. your tax breaks disappear overnight, except for COST OF GOODS
b. your tax rates jump by 10-15%
3rd if you sell out to a foreign entity then #1 & 2 applies
anything short of this is called robbery and both congress and greedy corporations need to be held accountable.
Yes the social acrimony is getting to a fever pitch and I for one have had it.
Fred Fischer
Commercial Real Estate Broker
ArizonaPosted by bob pischke | Dec 9, 2008 8:44 AM ET
