The Washington Post: The American retirement system is built for the rich (April 20, 2022)

The Washington Post has made available for download their article, “The American retirement system is built for the rich”, which discusses how tax legislation often yield generous benefits for high-income savers more so than for the other portions of the population. The article begins as follows:

Democrats and Republicans in Congress don’t typically agree on tax policy. But late last month, 216 House Democrats joined with 198 of their GOP colleagues to pass legislation advancing a cause that both parties have championed in recent years: ensuring that high-income individuals can stuff even more money into their tax-advantaged retirement accounts. Only five House members — all Republicans — voted no.

Overwhelming Republican support for the bill — known as the Securing a Strong Retirement Act of 2022, or Secure 2.0 — comes as no shock: Tax-cutting has long been a central plank of the GOP platform. What’s more surprising is that every Democrat in attendance backed the measure, too. Even Rep. Alexandria Ocasio-Cortez (D-N.Y.) — a pillar of the party’s left wing who at a gala last September sported a gown with the slogan “TAX THE RICH” — voted to bestow billions of dollars in benefits on the very taxpayers whom she says should pay more.

Bipartisan support for Secure 2.0 is part of a decades-long pattern: While loudly and proudly proclaiming that their goal is to nurture nest eggs for the working class, lawmakers have constructed a complex of tax shelters for the well-to-do. The lopsided result is that as of 2019, nearly 29,000 taxpayers had amassed “mega-IRAs” — individual retirement accounts with balances of $5 million or more — while half of American households had no retirement accounts at all. Overall, according to the Congressional Budget Office, the top 10th of households reap a larger share of the income tax subsidy for retirement savings than the bottom 80 percent.

To see the full article, click: “The American retirement system is built for the rich”

Posted by Anthony Tran, Associate Editor, Wealth Strategies Journal

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