Dems Announce Program for Savings Tax Incentives

Democrats tax specialists Rahm Emanuel (IL) and Earl Pomeroy (ND) were joined at a news conference by House luminaries Nancy Pelosi (CA) and Charles Rangel (NY) to promote Democratic plans to encourage savings, particularly by low-income and middle-income workers. Among proposals are automatic enrollment in 401[k] plans, a permanent and refundable credit for saving and automatic deposit of income tax refund checks into personal savings and IRAs. Rep. Emanuel said that these proposals were designed to encourage retirement savings outside of Social Security; it was not clear from the Tax Analysts article whether the Democrats also planned to offer an alternative to private/personal Social Security accounts.

One of the most difficult campaign claims made by Republicans for Democrats to handle has been the charge that Democrats have been more interested in complaining than in proposing solutions to problems. Time will tell whether these tax proposals will resonate with economists and the general public; the fact that the proposals have been made, especially if there is a follow-up alternative to private Social Security accounts, is an important step forward by the Democrats.