New Retirement Plans From Your Employer…

If employers need to provide “retirement” benefits to attract and retain the best workers, the marketplace would dictate how they should do that.  The 33% Solution would tax these benefits using “earned income” rates but – and this is important – the employer would put all of the money into these plans and would pay all of the taxes.  Employers’ would be able to create longer vesting schedules than those in the old system.  However, they could not keep you from taking all of the money they put aside for you for longer than is reasonable.[1]

Life Insurance…

Life insurance death benefits paid to a spouse (directly or through the estate of the deceased person) and life insurance death benefits paid to a named beneficiary would free of income tax and estate tax.  These monies become a part of the estate of the beneficiary and incur a tax only at the death of the beneficiary.  Proceeds payable to a trust are also tax-free, and incur a 33% tax when the trust owner closes the trust or distributes the money to the beneficiaries of the trust. [2]