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The guy is totally off. I happen to know this bit and therefore find everything else rather specious. All countries allow one to contribute tax-free to their p
by omonra 11y ago
The guy is totally off. I happen to know this bit and therefore find everything else rather specious.
All countries allow one to contribute tax-free to their pension OR contribute with after-tax income but withdraw without paying tax. US happens to use the former system. You are basically allowed to contribute a certain amount of your income before paying tax - but will pay tax when you receive the pension.
The idea is that people have lower income during retirement and allowing them to shift tax burden to retirement will induce them to save more.
I don't see anything favoring the rich about this system (only inasmuch as people who make more money benefit more from paying less tax - which I have no problem with).
- maxerickson 11y agoI think the framing is not productive, but the underlying point, that tax breaks should be on the table when discussing the tax system, is a reasonable one. The broadest discussions of tax policy usually talk about the highest tax bracket a person pays taxes in, they don't often move on to talking about effective tax rates.
- omonra 11y agoI agree on the larger point you made. However - a lot of the 'tax breaks' are not really 'breaks'. They are tools created to avoid double-taxation.