No. of Recommendations: 5

<<<<{{If "reward" = "encouragement" as cattleman says, here are some reward/punishment scenarios:

You live off capital gains. Tax rate 20%

You live off dividends. Tax rate 15%

You work for a living. Tax rate 33%}}>>>

"I was thinking of completely different rewards. The rewards I that crossed my mind were ones such as Roth IRA's where that money will never be taxed again or 401k's where the money or wealth accumulates tax free until it is withdrawn."

I do not assume that Roth IRA money will never be taxed again. I fully expect that one day Roth IRAs will be treated like non-deductible traditional IRA. In addition, if all those who argue for a national consumation tax to replace the income tax, then any Roth IRA money withdrawn and spend will be taxed under that sceanrio.

"My perception was that Daschle wanted to get rid of these vehicles which reward wealth accumulation."

We are back to your perception, rather than what he said, but I wonder if you have (or have seen) any data to support the idea that those accounts encourage a net increase in savings. Data I seen some time ago, and do not have handy so do not bother asking for citation, suggest that they have minimal impact on total savings but just change the form of savings that would have otherwise been made.

'If saving is not to be rewarded or encouraged, Daschle would not want to encourage or reward people to save up an emergency fund. because even $1000 in an emergency fund is "wealth accumulation."'

And if your starting proposition is off, then your conclusion does not follow. The actual statement was a comparative statement, not an absolute statement.

(posted before reading entire thread)

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