alt Hacker NewsIt doesn’t even have to be raiding of accounts. They can modify rules of RMD to drive tax revenue or even entirely change the rules of 401k withdrawals such that if your balance is over a certain amount you pay an extra tax.
I don’t think it’s far fetched that 401ks of a certain value start to experience penalties to make up shortfalls. After all, the whole reason they would need to do this is because they failed on the promise of social security. Why not fail on the promise of the 401k?
It’s far-fetched for a number of reasons:
1. It upsets the most influential voting demographics. I struggle to find any national policy implemented in the last few decades that has truly disrupted the kind of upper middle class voter that has a lot of money in a 401k.
2. If you tax 401ks higher than long term capital gains tax then higher earners just won’t use 401ks/IRAs.
3. 401ks and IRAs are completely detached from the way social security is funded so they aren’t even really the most logical place you would go to fund social security. E.g., why not just raise the social security payroll tax?
5. It’s less logical to do this than to remove the social security tax cap.