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Retirement1

No Security Here

Maryland’s General Assembly leadership has made an odd decision concerning the need to guarantee “Retirement Security” for Maryland workers:

The top leaders of the General Assembly launched a new legislative effort to establish retirement security plans for more than a million Marylanders who would otherwise rely entirely on Social Security in their old age.

Senate President Thomas V. Mike Miller and House Speaker Michael E. Busch announced the formation of a Commission on Maryland Retirement Security and Savings at a State House news conference attended by U.S. Secretary of Labor Tom Perez.

Perez has been traveling the country on behalf of President Obama to promote the creation at the state level of workplace savings accounts in which employees would be automatically enrolled but would have the right to bow out of participation. The labor chief said workers who are auto-enrolled in such plans are about 15 times more likely to build up retirement savings than those who are not.

The Democratic justification for this Commission is priceless: The Report of the Governor’s Task Force to Ensure Retirement Security for All Marylanders, chaired by Kathleen Kennedy Townsend. They key sentence: “There are some who are living hand-to-mouth and simply cannot afford to save. This is a tragic, but fortunately small, portion of Marylanders.”

Greg told you why this was a bad idea and a fruitless exercise way back in December.

One of Governor Larry Hogan’s criticisms of Democratic leadership in Annapolis has always been the related to economic security. The Democrats run of 40+ consecutive tax hikes severely harmed the economic security of all Marylanders, working and retired. Eight years of Democratic budgets that continued to spend money that was not there severely harmed the economic security of all Marylanders. The thousands of fees that were raised during the O’Malley Administration severely harmed the economic security of Marylandres. How? All of those things made it more expensive to live in Maryland, and harder to find work due to the economic hardship of the cost of Maryland’s tax and regulatory climate.

Is it any wonder then that some Marylanders can’t afford to save for retirement?

What’s odd is not that the General Assembly wants to look at creating a new entitlement program, nor is it odd that the General Assembly wants to tell people how they have to spend their money.  What’s odd is their sudden interest in retirement security.

Maryland Democrats want to continue to tax retirement income at the same rate as other income. They have been steadfast in their opposition to any changes to the level of taxation for such income. Several Republicans in the General Assembly have introduced legislation in the past that would exempt military, police, and fire retirement and pension programs from taxation. Not once has such bills moved out of committee.

It’s not a coincidence that so many retirees move out of Maryland to states that don’t tax their retirement income.

The Commission seems predestined to recommend many of the same things that that Townsend task force has recommended. As Brian Sears notes in The Daily Record, the Commission will include Townsend as well as State Senator Jim Rosapepe, who’s been a champion of this stuff:

Rosapepe, who will serve on the commission, has sponsored legislation to create a mandatory retirement plan in each of the last two sessions. Under Rosapepe’s plan, company’s with five or more employees would have to offer employees a qualified retirement savings plan or participate in a state administered retirement system. Employees  would be automatically enrolled for a 3 percent payroll deduction. Workers would have to opt out of the plan if they did not wish to participate and employers would not be required to contribute but could do so voluntarily.

You’ll probably note that it sounds like a program typical of Maryland Democrats: a onerous, burdensome requirement on business and taxpayers that will create new reporting requirements, more bureaucracy, and take money out of the pockets of businesses and taxpayers alike. One that will fortunately be stopped by Governor Hogan before it ever gets off the ground.

Retirement security is a problem for many, many Marylanders. But the problem lies in Maryland’s economic climate, tax climate, and regulatory climate making it hard for Marylanders to make ends meet. When the choice is between putting food on the table and saving for retirement, rational people are going to put food on the table. We should be doing more to make it easier for folks to retire by making it cheaper and less onerous to live here. And the opposite of that would be the creation of another new government program that will stifle wages, increase regulatory burdens, and increase the cost of doing business in Maryland.






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