Comments on: Your Take: Boost Savings Rate by Cutting Taxes

By: Mike

Mike — Sat, 06 Mar 2010 05:31:31 +0000

I think we should allow more Asians in to the US. They have one of the highest savings rates in the world. We could use more of them in our country to balance out all the idiot tax and spenders.

By: Financial Samurai

Financial Samurai — Wed, 03 Mar 2010 23:17:55 +0000

If we all save, the economy would IMPLODE.

The government needs everybody to spend like banshees.

By: lsward

lsward — Tue, 02 Mar 2010 00:07:04 +0000

Makes no sense to save. You get a half percentage point from your savings account and they take 25% of that for taxes. What does that really make your savings account interest rate? Now add in inflation and you are better off buying stuff now that will cost you more in the future than you are earning off the money now. It is a lose lose situation.

We personally still save because we don’t want debt and would rather pay for what we need with cash, but the truth is, no one wants Americans to save or they would make it easier and more beneficial.

If you know the rule of 9, they can only grow the economy if we are in debt.

By: MikeB

MikeB — Sun, 28 Feb 2010 14:26:37 +0000

The government gives me tremendous breaks on my taxes. The two, hobby based, small businesses I run, when I am not at my full time job, provide me lots of tax deductions and has put me into a lower tax bracket. That would help lower the tax on your savings, wouldn’t it?

By: thomas

thomas — Sun, 28 Feb 2010 01:36:08 +0000

Just like a lot of great ideas for encouraging savings and retirement investment, this one will go bust. gov’t dependence is what those in charge want. no sense in being self sufficient.

By: thomas

thomas — Sun, 28 Feb 2010 01:34:08 +0000

or a reason to live in Ma.

By: thomas

thomas — Sun, 28 Feb 2010 01:33:15 +0000

harumpf! so very true.

By: lagreat

lagreat — Sun, 28 Feb 2010 00:17:08 +0000

Fine article Jim. I beleive even if the tax rate is brought down to 15% like dividend interest it’ll be a win-win for everyone. If I am not mistaken we are the country with that saves the least and such an action by congress will definitely give a boost to personal savings.

By: Safeway_Sage

Safeway_Sage — Sat, 27 Feb 2010 19:12:14 +0000

I guess this is an interesting academic discussion, but I simply don’t put enough in my basic savings account to get hit with a big tax bill! (But I do save)

By: billsnider

billsnider — Sat, 27 Feb 2010 16:04:51 +0000

Ditto.

I did the same. No debt, saved to the hilt and follwed the 100% rule of investing. Helps me to sleep at nights.

I also rolled my pension over. I didn’t trust the company i worked for. i had two bad prior experiences. Worked out it would have been three if I was still there.

Bill Snider

By: billsnider

billsnider — Sat, 27 Feb 2010 16:00:56 +0000

I have a few brokered CD’s with Fidelity. They are covered by the FDIC up to their usual limits. As to taxes, you pay the usual rates.

Note that they are not technically CD’s. They sell and are treated like bonds. You buy them in $1,000 denominations.

They can go bust if the bank does. I had this happen to me. The FDIC paid Fidelity who gave me my money back.

Note like bonds, some are callable. The bank can cancell them. I had this happen also with a high rate CD. They dropped me like a hotcake when rates went down. Note that when you buy these, the brokerage firm will tell you 1) if they are callable and 2) if they are insured by the FDIC as well as other terms. Helps to get a rating on the bank from Bauer. They give you a free bank ratying and are on the interent.

Note that the interest rates tend to be lower to cover the brokerage commission. they are good to use if you are pushing around a lot of money and you can’t cover the FDIC insurance from one or two banks.

You can get more insurance from one bank by having different methods of ownerip. For instance, you are one account, your spouse is another, you jointly are another, you and a child are another and so on.

Hope this helps.

Bill Snider

By: Darwin Benedict

Darwin Benedict — Sat, 27 Feb 2010 13:19:17 +0000

Being on retirement income, I would like to pull more out of the stock if interest rates were more in a saving account.
The banking business has all most quit paying interest because there is no advantage for them to do so. Thus people won’t save more. If the Reserve would have a program for banks to earn more I would think it would be passed on. It all depends on how Wall Street would see it.

By: Shirley

Shirley — Sat, 27 Feb 2010 11:11:48 +0000

That is definitely the way it worked out for us, although I can’t say that keeping our marginal tax rate low was a key part of “the plan”. It just works that way.

Before I retired we made sure that we had no outstanding debt and could live quite comfortably on the two Social Security checks and a monthly IRA distribution.

I had 15% of my gross pay going into the IRA and I also rolled over my 27 year employee retirement cash value into it.

By: eric

eric — Sat, 27 Feb 2010 07:15:14 +0000

I wouldn’t mind

By: saladdin

saladdin — Fri, 26 Feb 2010 23:47:00 +0000

And lost revenue for the government that will have to be made up somewhere else.

saladdin