By Nancy Thorner and Jane Keill – 

Could government mandated guaranteed retirement accounts (GRAs) be in Illinois’ future?

Disturbing information that could one day affect all private sector employees was discussed recently on Fox’s Neil Cavuto (w/Stewart Varney) and later in the day on Special Report with Bret Baier:


The California state legislature is pushing a new plan, called ‘Secure Choice Retirement Savings Program’, which will require private-sector employers to extract 2 percent of every employees’ paycheck and send it to the state cofferseven though the employee may choose not to participate.


The money would be put into a state fund with a guarantee – Oh, we Promise, Promise, Promise! – that all funds will be invested and you will get your money, plus gains, back at your retirement age.


California’s plan is yet another way to look for a way to open the door to grab your personal income and force you to ‘save with the state’ – whether you want to or not. Employers who do not send in this 3% requirement would be penalized $250 for each employee.


The program is supposed to supplement Social Security and provide forced retirement savings for workers who do not have access to a retirement program with their current employer, or who have chosen not to take their employers’ offered retirement program. Whether or not the individual may wish to participate, it would amount to a forced, no-choice 3% deduction out of every paycheck.


California’s proposal is the first-in-the-nation law at the state level, but of course other states have shown interest in it, as well as our politicians in Washington, DC. California’s program must have approval from the IRS and the U.S. Labor Department before it can be enacted, but quick and easy approval is expected. Once these approvals have been made, California can vote on the program, probably by next year. More here.


As far back as October of 2008, the federal government has been exploring ways to stem losses by workers and retirees who were losing money from their 401Ks and IRA accounts due to unemployment and the bad economy.  At the 2008 hearing of the House Committee on Education and Labor, Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, proposed mandatory participation in a government-run savings plan to which each citizen would contribute 5 percent of his salary, to be administered by the Social Security Administration, but separate from a citizen’s social security account.


The issue came up again in October of 2010 in another hearing, this time by the Senate Health, Education, Labor and Pensions Committee.  Ms. Ghilarducci, again a witness, proposed the same plan she advanced at the 2008 House hearing.  At that time, there was no follow through, but the concept of financial confiscation was not forgotten.


In an article published at Illinois Review by Thorner and Keill on Sunday, April 13, 2013, Sticky Fingers Eye Your IRAs, “sticky fingers” referred to a proposal, given short-shift at the time by the news media.  It was on April 10 when President Obama released his FY $3.77 trillion budget proposal.  Under current law, Americans who save money in tax-deferred retirement accounts are taxed on the money when they withdraw it.  An additional tax penalty is imposed if withdrawal is made before retirement age.


Obama’s proposal would limit an individual’s total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per year in retirement.  First Obama decides you’re wealthy if you make $250,000 or more.  Now, he’s telling you how much you can have to live on in your retirement.  What will he do with the rest of it?  Tax it, of course!


In addition, the ideas from Richard Cordray, Director of the Consumer Financial Protection Bureau for ‘helping you manage your savings’ and Jesse Jackson’s suggestion to use your savings to make loans to low-income groups, show the variety of politicians who are interested in relieving you of your hard-earned savings.


The Federal and many of the state governments are desperate for money.   They’ve gotten us into a huge mess of debt and overspending and are determined to find money anywhere they can.  They are drooling to confiscate, attach, grab and otherwise latch onto your personal savings and incomes.  These governments also have their union buddies who are demanding payback for getting them elected.  The unions want this money to back up and support their own very expensive pensions, retirements and health care plans.


We can now see there are multiple agencies who have their eyes on the estimated $20 trillion in American savings:  a ‘Social Security’ type savings account, a Presidential limit on how much you deserve to have for retirement, elimination of the tax-deferred status of savings accounts, government help in managing your money, using savings accounts to make loans to low-income groups and now California’s punitive, enforced savings – like it or not.  They are coming at us from many directions in an effort to find an opening to put their foot in the savings doorway.


When Senators and Representatives and states see billions and billions of dollars sitting out there in investment and savings accounts, it is not difficult to imagine what they thinking of  –  YOUR MONEY.


If you think this can’t happen, you haven’t been paying attention.  California’s Secure Choice Retirement Savings Program proposal should serve as an eye-opener, as it represents appealing legislation that could be rammed down the throats of Illinoisans.


If you care about your money, and object to either Illinois or the federal government latching onto your personal savings and incomes, then pick up the phone and do something about it by calling both your state and federal representatives.  Tell them not to monkey around with your money.


For Californians, if you allow this to happen you are total idiots!


For more insight, a must read is an article that appeared February 22, 2013 at the American Thinker by John White, The Feds Want Your Retirement Account.  The first paragraph of John White’s article should be enough to convince you to check out his comments.


Quietly, behind the scenes, the groundwork is being laid for federal government confiscation of tax-deferred retirement accounts such as IRAs.  Slowly, the cat is being let out of the bag.

Tuesday, July 30, 2013 at 11:48 AM | Permalink



First published at Illinois Review on September 4, 2012

If Obama is re-elected on November 6, it won’t matter if the Republicans keep the House and/or take the Senate or vice versa, because Obama has proven to us time and again that he will simply do as he pleases. If Congress won’t pass what he wants, President Obama will issue an Executive Order – whether it’s Constitutional or legal or not – and force the action on us anyway. No one has stopped him so far. No one will stop him in the future.

With certainty, whoever wins in November will have the leverage to dictate the terms of the Bush Tax rates which are scheduled to expire on January 1, 2013.

There is good reason to believe that the Bush Tax rates would be extended under a Romney presidency, but should Obama be re-elected, he and the Democrats will allow the Bush Tax rates to lapse.  Your tax bill will go only in one direction, UP!  Also, if you die after January 1, 2013, your estate over $3,000,000 will be taxed at 55%, instead of 0% currently in place.

The election of President Obama would also definitely grant the taxes that are coming with  the Obamacare health plana continued lease on life. Within the this plan are about 20 new taxes that will be added to your already high tax load.  Many of these taxes are already in place and others are ready to roll on January 1, 2014, the date engineered by Democrats to prevent back lash from voters before the upcoming November election.

The Alternate Minimum Tax (AMT), which has never been indexed to inflation, will no longer hit the ‘rich’, as was its original intent. It will now hit approximately 28,000,000 tax-paying, average American citizens.And, rolling down the tracks to join the above taxes are two other taxes should Obama be re-elected to a second term: The VAT (tax) and the Guaranteed Retirement Account (GRA).

How else can Obama deal with the staggering debt of $16 trillion plus, of which he has created over $6 trillion in his first term, unless new taxes are imposed upon the American people? After all, taxes are the meat and potatoes of the Democratic Party. Enough is never enough to keep constituencies happy and to retain power.

From Wikipedia comes this explanation of the VAT (Value Added Tax):

“A value added tax (VAT) is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the value added to a product, material, or service, from an accounting point of view, by this stage of its manufacture or distribution. The manufacturer remits to the government the difference between these two amounts, and retains the rest for themselves to offset the taxes they had previously paid on the inputs.

The value added to a product by a business is the sale price charged to its customer, minus the cost of materials and other taxable inputs. A VAT is like a sales tax in that ultimately only the end consumer is taxed. It differs from the sales tax in that, with the latter, the tax is collected and remitted to the government only once, at the point of purchase by the end consumer. With the VAT, collections, remittances to the government, and credits for taxes already paid occur each time a business in the supply chain purchases products.”

In 2010 the idea of a VAT (tax) was up for consideration by Congress.  Paul Volcker, who was at the time, President Obama’s debt and deficit commissioner, and other big-government advocates, said a VAT should be considered to fund major spending obligations.

According to an article written by John Northdurft and published on July 15, 2010, a Chamber of Commerce study indicates that Government spending grew 45 percent faster in VAT nations than in those without one. Northdurft was questioned as to whether imposing new taxes to pay down the deficit and fund unsustainable entitlement programs is irresponsible.  He responded, “Without real, extensive entitlement and spending reforms, the United States will not be competitive in the global economy and our national debt will continue to balloon.”

A VAT usually begins at a fairly low level and then soars once it has been put in place to feed a government’s insatiable craving for money.  A recent article in the Chicago Tribune (9/15/12) tells of a large increase in Iceland’s current VAT:

“Iceland:  The government is considering an astronomical tax hike on services used mostly by tourists, including hotel accommodations, restaurant meals and attractions.  If approved, the increase in VAT (value-added tax) to 25.5 percent from 7 percent would take effect May 1.  An outcry is expected from the tourism industry, especially tour operators who have booked trips for next year and cannot absorb the additional cost.”

Many European countries have a VAT (tax). It often runs between 15% and 20%. The VAT is often the main tax of a country; they usually do not also have an additional income tax or property tax. Once a VAT is in place, it’s almost never removed.

Should Obama be re-elected, past behavior predicts that he will apologize to the American people, telling them there is no other way to tackle the massive debt (still blaming Bush!) other than to adopt the VAT (tax). Obama will further implore the American people to trust him because it must be done, after which the American people will be obliged to pay another tax in addition to the ones they already pay.

As with the VAT (tax), the Guaranteed Retirement Account (GRA) issue is still lurking in the background waiting to be put into effect. This tax idea recently was raised in 2008 as one way to stem losses by workers and retirees who were losing money from their 401Ks and IRA accounts due to unemployment and the bad economy.

The program involves mandatory participation in a government-run savings plan to which each citizen would contribute five percent of his salary. The plan would be administered by the Social Security Administration, but would be separate and in addition to the citizens’ current social security accounts. In turn, a refundable tax credit of $600 would go to each participant, regardless of his contributions. The account would have a guaranteed interest rate equal to the government’s official inflation rate plus three percent.

Further suggested at the time to/by Congress were that tax breaks for 401Ks and IRAs and pensions be eliminated and these funds be put under the GRA to be run by Social Security. The result: By giving up your earned pensions and savings and investments to the Federal Government, in return it would guarantee – oh, absolutely promise! – you would be paid a specific amount when you retired – for the rest of your life.  Just like Social Security!

Given a national debt of $16 trillion staring legislators in the face, with no serious effort to stop or reduce it on either side of the aisle, there is little doubt that Democrats in a second Obama term would look at what Europe is doing,

With GRA, the government would take away your last vestige of personal control. It doesn’t matter that government did nothing to earn it or grow it. They want it. They need it. They’ll throw it away and give it away. They’ve put this country into trillions of dollars of debt and they are desperate to find money anywhere, not only to pay the bills, but to continue spending.

How could legislators be expected to resist the lure of trillions of dollars of private savings just sitting out there being used by private citizens? They’ll want to ‘redistribute’ those funds to all those who ‘need’ it and never worked for it – because it’s fair, don’t you see?

And, don’t think the Republicans won’t fall prey to the same lure. We’re out of money. Somebody has to find it somewhere, and these savings would be easy pickings. Just nationalize everyone’s accounts and give them a receipt with a promise to pay it back – with interest.

Why not beat your Senators, your Congressmen and the White House to the punch. Call them and warn them you are aware of this movement and don’t want it happening.

If you fail to let your elected federal legislators and the White House know you are watching them, they will quietly go about their business and will keep you in the dark until it’s too late. Always keep in mind what will happen if Obama is re-elected and has four more years of uncontrolled power with no accountability to any one.

In November you have one chance to vote Obama and others who think like him out of office. Don’t blow it!