He suggests changing the deductibility of 401(k) and IRA accounts to a nonrefundable tax credit. Instead of giving an individual in the 10 percent income-tax bracket a 10 percent benefit, give a dollar-for-dollar credit on his income tax. For high-income savers, the credit would be capped.
Operationally, capping pretax savings would be a nightmare. The amount of money required to generate an annuity of $205,000 at today's interest rates is greater than if they stood at, say, 5 percent.
What happens then? Is the additional principal returned to the individual and taxed at his current rate? What happens when interest rates fall, requiring more savings to guarantee the maximum annuity payment?
You get the point. It should be obvious that the proposal to cap retirement accounts was designed to punish the rich rather than strengthen the middle class. The result is something that's "unworkable, unmanageable and un-administrable," Fichtner says, rather than good retirement policy.
There is a much simpler solution to Romney's IRA. If the problem is ensuring that partners in private-equity firms don't put low-cost-basis shares into their IRAs, the government could stipulate that only cash be invested.
Perhaps a more important question is whether the government should be subsidizing saving in the first place. In a recent working paper, Chetty and four co-authors found that the tax subsidy for retirement savings accounts cost the government $100 billion a year.
That puts it among the top five tax expenditures, or loopholes that are really government spending by another name. And it's much less effective than automatic saving.
The well-to-do don't need a tax incentive to save. At some point, they have all the homes, cars, yachts and airplanes they could ever want. And while saving is certainly a worthier pursuit than many of the activities government subsidizes, studies suggest there are more effective ways to achieve that goal. So why pay people to do what they are already doing?
We shouldn't, Fichtner says. "But we should make sure we help those who aren't doing it, do it."
That sounds like something out of the Obama playbook. Having just paid a lower effective tax rate (18.4 percent) than his secretary this year, the president may want to rethink his fairness doctrine. That might help him to differentiate between good ideas for retirement saving, such as automatic enrollment, and purely political ones. At least we can hope.
Baum, author of "Just What I Said," is a Bloomberg View columnist.