Focus Point - Expanding IRAsCommentary by Pete du Pont
October 19, 2000
I'm Pete du Pont with the National Center for Policy Analysis. In July, the House voted to expand the amount taxpayers can invest in IRAs and 401(k) plans. The republican plan got 181 democrat votes.
So why the White House attack? Clinton-Gore claimed the bill would drain money from the surplus, leaving too little for "key priorities," washingtonese for government spending.
But the estimated revenue loss from those investments is small, only $5 billion a year in an economy approaching $10 trillion. If the retirement savings incentives were even modestly successful, economic growth could easily end up enlarging the surplus because of tax revenue from the additional growth.
It's time to increase contributions to retirement plans for another reason: The amount people can contribute to an IRA has been stuck in the same place for almost 20 years. And Clinton-Gore class warfare rhetoric to the contrary, the law's written so that only lower-middle income people get the full tax deduction for IRA contributions.
And, of course, it's your money.
Those are my ideas, and at the NCPA we know ideas can change the world. I'm Pete du Pont. Next time, the numbers behind tax cuts.