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- Title
Pension Tax Subsidies for the Super Rich.
- Authors
Turner, John A.; McCarthy, David D.; Stein, Norman P.
- Abstract
Even though U.S. tax policy has attempted to prevent this outcome through contribution limits, some wealthy Americans have received huge tax subsidies on their individual account pensions. A recent study documents the existence of very large individual account pensions in the United States, with some exceeding $50 million and the very largest having more than $250 million per participant. These large account balances imply rates of return of 20-30% or higher over a number of years, compared with long-run rates of return of 7-8% in the stock market. This article investigates the amount of tax subsidy received by the participants with the largest account balances and finds that the holders of the very largest individual accounts have received tax subsidies of considerably more than $100 million. The authors argue that tax policy has played a role in the very large pension wealth holdings at the high end of the wealth distribution.
- Subjects
UNITED States; PENSION trusts -- Taxation; TAX incentives; INDIVIDUAL retirement accounts; BANK accounts; WEALTH tax
- Publication
Benefits Quarterly, 2016, Vol 32, Issue 3, p21
- ISSN
8756-1263
- Publication type
Article