Advertisement

Bush’s Special Savings Accounts

Share

Your editorial scorn for Vice President George Bush’s plan to promote saving by the less well-off is undeserved (“Saving Face, Maybe,” Sept. 29). A great many individuals would take advantage of the Bush plan just as they did the Individual Retirement Accounts before Congress slammed that door to tax-deferred savings.

Since the Bush plan limits tax-deferral benefits to only $1,000 per year, it won’t enable the saver to buy a house or start a business, but he or she certainly can make a start toward financing college. True, your unrealistic example of a one-time deposit of $1,000 at 10% for five years won’t improve things much.

But if, as is the more likely case with people of limited income, the saver invests $83.33 every month ($1,000 per year) over the five years at 10% he will accumulate a nest egg of $6,234.91 after settling the tax bill, compared to $5,315.86 for the annual taxpayer--$919 better! Moreover, the IRS will receive $58.06 more in taxes by the tax deferral.

Advertisement

It actually seems Bush has an idea worth developing to reverse the disastrous shrinkage in private saving.

BURTON P. SAUER

Hermosa Beach

Advertisement