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The Origins of the Ownership SocietyHow the Defined Contribution Paradigm Changed America$
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Edward A. Zelinsky

Print publication date: 2008

Print ISBN-13: 9780195339352

Published to Oxford Scholarship Online: January 2009

DOI: 10.1093/acprof:oso/9780195339352.001.0001

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What Should We Do?

What Should We Do?

(p.147) CHAPTER SEVEN What Should We Do?
The Origins of the Ownership Society

Edward A. Zelinsky

Oxford University Press

This chapter explores our choices for molding the defined contribution paradigm as it evolves and identifies which of those choices are best. The first and most important imperative for the future is to do no harm. Second, we should amend Section 401(k) to require employees to opt out of 401(k) participation. We should also restore fiscal balance to the Social Security system to reduce that system's projected benefit payments. Pushing back the early and normal retirement ages at which individuals may collect social security benefits seems more politically palatable than is an economically equivalent reduction of annual payments commencing earlier. Fourth, the coverage of the Section 25B savers' credit should be expanded to subsidize, not just retirement contributions, but to reward contributions to HSAs, educational savings accounts, and Section 529 programs if the taxpayer prefers any of these instead. Finally, the ten percent (10%) limit on employer stock should apply to all defined contribution plans.

Keywords:   retirement, savings, regulation, individual ownership, control, tax expenditure, 401(k), default rule, employer stock, savers' tax credit

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