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.