This is the Cato Daily Podcast for Monday, October 15, 2007.

I'm Caleb Brown.

Americans save a tiny fraction of their incomes.

U.S. Senator and presidential candidate Hillary Rodham Clinton says she has a solution, a $20 billion subsidy to people who save their own money.

The Cato Institute's Chris Edwards says it's not a plan to promote savings, it's income redistribution.

Well, presidential candidate Hillary Clinton came out with a new 401k style savings account proposal recently.

The proposal would use federal taxpayer money to match individual savings in new private accounts up to a thousand dollars a year

for every account. So if an individual saved a thousand dollars they would get a gift

from the Federal Treasury for another thousand dollars. I argue that this isn't

really a savings plan, this is really just a new entitlement program.

It's a massive transfer of money from current taxpayers to other people who get $1, dollars free from the government every year if they want.

How has she proposed to pay for it? Well she's proposed to increase taxes on federal estates, in other words increase the federal death

tax which is a rather remarkable proposal because under current law the

current estate tax is eliminated for only a single year in 2010,

but then comes back in full force in 2011 at 55% at a 55% rate. So Senator Clinton seems to be proposing an increase in the

federal state tax even above the 55% rate that's effective after 2011. The reality is she won't collect any money from the

estate tax if you try to increase those taxes because the money will simply

disappear in tax avoidance. It'll go offshore. No sensible person

with a good accountant is going to pay higher than a 55% tax rate on their estate.

Senator Clinton says that for the first time, according to a newspaper article, that the share

of Americans with an employer-sponsored retirement plan has fallen below 50 percent.

The number of Americans, the share of Americans who have an employer-sponsored account, in other

...