WASHINGTON (Reuters) - Democratic presidential candidate Hillary Clinton on Tuesday proposed a retirement savings plan for lower- and middle-class families that would include tax credits as incentives for saving.
The plan, estimated to cost about $20 billion to $25 billion a year, would be paid for out of the revenues from estate taxes on wealthy Americans.
Clinton, a senator from New York and the Democratic front-runner in the race for the White House, said in a speech in Iowa the savings plan would help rebuild a “strong and prosperous middle class.”
“Many Americans have worked hard their entire lives ... but when it came time to retire they fell short,” Clinton said as she unveiled her “plan to help a new generation of Americans save and build wealth.”
“I think it’s imperative that we begin to let people acquire wealth again,” she said.
The proposal immediately drew fire from Republicans, who used it to paint her as an advocate of big government and big spending programs.
“It’s a troubling example of Senator Clinton’s belief that the government should have more power over your savings,” said Kevin Madden, a spokesman for Republican presidential contender Mitt Romney. “Hillary Clinton puts her faith in government while Governor Romney puts his faith in the wisdom of the American people.”
“Hillary Clinton has proposed over $650 billion in additional spending and has failed to put forward a logical or rational explanation of how she plans to pay for it,” said Danny Diaz of the Republican National Committee.
Under the program, Clinton would provide a $1,000 maximum tax credit for the first $1,000 of savings by married couples who have an annual income of up to $60,000. The plan calls for a $500 maximum tax credit on the first $1,000 of savings for every couple making between $60,000 and $100,000.
The plan would build off the existing employer-based retirement savings system and would allow individuals to contribute up to $5,000 per year on a tax-deferred basis, though only the first $1,000 would be eligible for government matching tax credits.
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