
Google exploits loophole to help employees evade taxes on $36,500 / year - resalisbury
https://medium.com/@rex.salisbury/google-exploits-loophole-to-help-employees-evade-taxes-on-36-500-of-income-8fade7901434
======
viridian
I was sort of with the author until I got to the recommended policy change
they want to see from legislators:

"We should abolish all tax advantaged savings accounts. If the $158 billion in
savings were then distributed evenly, every household could receive $1,250 per
year and companies like Google would no longer pay HR tax specialists to
exploit our tax code."

The author appears to literally suggest we just take everyone's 401(k)s and
IRAs for the year, give them away, and abolish the whole system. How is this a
reasonable policy?

~~~
barbegal
Tax reduced savings accounts effectively flatten the tax curve because whilst
they are available to everyone only those being paid more can effectively make
use of them.

On the other hand it does incentivice the higher paid to save more for the
future rather than spending it now. This can save governments huge amounts
when personal savings are used to pay for elderly care and medical treatment
as opposed to the government.

------
tomohawk
These are important tools for saving for retirement, and have enabled many
people to build wealth. I know people who never made a lot of money in any
given year, but used these tools to save money over decades, and they now can
enjoy a good retirement. Calling these things loopholes, tax avoidance, or
what have you is misguided and counterproductive.

We already do not have pensions, taking away private pension options such as
these would condemn many to not ever being able to be retired, or to poverty.

~~~
resalisbury
Even if you don't abolish these, you could at least cap the total contribution
(and even lift the annual contribution limit). A cap of $1.0 million per
individual would allow for a safe withdrawal rate of approx. $40k / year
(social security income would provide a further boost to that). You could move
the cap higher or lower as you see fit.

There are over 150,000 individuals w/ a 401k balance over $1.0 million; there
is little social benefit in providing millionaires with even more in a tax
advantaged savings.

[https://www.investors.com/etfs-and-
funds/retirement/retireme...](https://www.investors.com/etfs-and-
funds/retirement/retirement-savings-more-americans-than-ever-have-1-million-
or-more/)

~~~
cromwellian
$40k year is below the cost of living, or will be, in many regions. People
also use 401ks for home loans, and for other lie events. I took a 401k loan to
make the down payment on my first house.

Most high income truly rich people aren't using 401ks for retirement, it seems
to me that once again, people are going after the professionals who are
squeezed in the middle, who already pay high tax rates because most of their
income is wages -- doctors, lawyers, engineers, and avoiding the top 0.1% and
others who amass vast returns and mostly avoid income taxes.

Maybe we could try going after the big fish first before we start raiding
retirement savings?

