President's Private Retrement Accounts Subject to Highest Level of Taxation

PRESIDENT'S PRIVATE RETIREMENT ACCOUNTS SUBJECT TO HIGHEST LEVEL OF TAXATION -- (House of Representatives - February 16, 2005)

(Mr. GEORGE MILLER of California asked and was given permission to address the House for 1 minute and to revise and extend his remarks.)

Mr. GEORGE MILLER of California. Mr. Speaker, one of the most interesting things about the President's plan to privatize Social Security is that for those individuals who decide to take out a private account, not only will that lead to benefit cuts into the future, very substantial benefit cuts for the recipients, up to 40 percent, but those who decide to take out the private accounts will find out at the time of their retirement that unless their accounts have earned inflation plus 3 percent, that they will be taxed up to 70 percent or higher of their benefits that they risked and put into that private account.

It is rather interesting that Republicans who so often make ``no tax'' pledges will subject those retirees to the highest level of taxation of anybody else in the country. Most people pay 20, 15, 20, 25 percent of their income, but those retirees on that benefit, on those accounts, the government will take back up to 70 percent of that unless they achieve some remarkable rate of return that is beyond the historical rates of return guaranteed by the marketplace.

Mr. Speaker, it is a rather interesting proposal that that is where they would decide to levy taxes, on those retirees who open those private accounts, to increase savings in this country.

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