"Is it possible that the privatization tax could entirely eliminate the value of one's privatized account?"

A Privatized Account that Earns the CBO-Projected Rate of Return Would Have its Entire Value Eliminated By the Privatization Tax. According to the Congressional Budget Office, the privatized accounts are, in fact, expected to produce a risk-adjusted rate of return of 3% above the inflation rate. Therefore, the automatic reduction of Social Security benefits would equal the entire value of the privatized accounts. In effect, the automatic benefit reduction would constitute a 100 percent tax on the retirement savings in those accounts. [Center on Budget and Policy Priorities, "How The Individual Accounts In The President's New Plan Would Work," 2/4/05]