Hidden Nook

"The lifetime savings account would be an excellent option for those currently eligible for individual development accounts to save money," Rep. Johnson said in a statement. "Lower-income Americans are sometimes just one paycheck away from bankruptcy, and an LSA would allow them to save for any of life's emergencies and needs in one account."

Now, let’s compare a traditional IRA to a Lifetime Savings Account. For an LSA, there are no income restrictions of any kind; in fact, I’m not required to have any income at all. It doesn’t matter whether I have any retirement plans. And as long as I am alive, there are no restrictions on when I can take out the money. And there are no restrictions on what the money can be used for. And I can place up to $5,000 in the LSA or, if I can convince my generous uncle, he can put the money in a plan for me or in a plan for my child (who doesn’t need to have wage income). And, now for the best part, every dime I take out of an LSA is tax-free. All earnings are tax-free! But, of course, I don’t get an income tax deduction for the money I put into an LSA. I wonder how many people would still prefer an LSA?

Now, how many taxpayers will put money into an LSA? Answer: Every taxpayer who wants to have any savings for any period of time will put money into an LSA. Yes, some may spend some of the money the next day. But one doesn’t have to be a genius to realize that it’s better to leave the money in the LSA as long as possible since all the earnings will be tax-free! Anyone who claims that the Lifetime Savings Account will not increase savings substantially is kidding himself. The real problem liberals have with LSAs is that that they will be so incredibly popular that virtually everyone will set them up! And since everyone would have LSAs, the politicians wouldn’t easily be able to take them away.