How do you provide increasing government benefits with a shrinking workforce? You tax the people who work twice. Let me explain how this happens during tax time.
Back when I had a good job with good benefits, I put ten percent of my income into a 401k. Figuring that I would be working for a long time I put forty percent of the savings into tax deferred savings, the other sixty percent I paid taxes on.
My logic was to pay the taxes then and get it over with. Now that I am making less, and of age to collect, I took a disbursement. Unfortunately I had to pay taxes on the whole amount. It used to be that a 1099-R would record the the ratio of pretax and post tax savings were dispersed. Two years ago the government removed that record from the 1099-R.
To avoid having to pay taxes twice, I would essentially have to have all the records of my investments and sue the government. Of course I am still working, so I do not have the time, or money, or all the records to use the government.
The is the second time that I am not happy with the IRS. I am involved with a very small non profit, six years ago the IRS made many unnecessary demands for documentation with dire threats of incarceration. A complete waste of my time. I was not impressed.
Taxed twice for working, and trying to plan ahead. Not impressed at all.