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Business Wire: American Retirement Association: Warren’s Medicare Proposal is a Middle-Class Tax on Retirement Savings

Today Senator Elizabeth Warren (D-Mass) unveiled her plan to pay for “Medicare for All” – and it’s going to come right out of the retirement savings of the Middle Class.

Warren, a Democratic presidential aspirant, claims to raise “about $800 billion” over the next ten years by what is called a “small” tax on financial transactions” which would include the hard-earned money set aside in the retirement savings of millions of hard-working Americans.

The proposal includes a 10 basis point financial transaction tax that applies to American workers’ 401k plans. While it claims to have “little to no effect” on most investors, consider:

  • American workers will have to work 2-1/2 years longer to make up for the lost retirement savings due to this new tax, according to an analysis by Vanguard.
  • A separate report by the Modern Markets Initiative found that this type of tax would siphon off $64,200 over a 40-year lifetime savings in 401(k)s and IRAs – or the equivalent of delaying the average individual’s retirement by two years.
  • A third of the over 80 million participants in these plans make less than $50,000.

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