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05-23-2011, 01:57 PM
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#21
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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I wouldn't worry about Roths, I would think that someone is looking at removing the caps on income with regards to when you don't have to pay FICA above that........to help fund SS..........
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Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
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05-23-2011, 02:50 PM
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#22
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Recycles dryer sheets
Join Date: Feb 2011
Location: On a dirt road
Posts: 334
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Just a quick glance around the web and see in 2008 Roths accounted for less than 5% of all IRA funds.
__________________
"Up sluggard and waste not the day, in the grave will be sleeping enough." Benjamin Franklin
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05-23-2011, 03:25 PM
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#23
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Thinks s/he gets paid by the post
Join Date: Apr 2011
Location: Madison
Posts: 1,337
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Quote:
Originally Posted by Gone4Good
It would be helpful to know how large the pool of Roth Assets is. I suspect it is really, really, really small; making any tax on these accounts rather pointless from a revenue raising perspective. But that information wouldn't help stoke fear and drive viewership, so it got left out.
No, I don't think this is something to worry about.
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I suspect you are right on the amount in Roths vs "everything else". Putting a tax on a Roth however could be a "tsunami" in the faith that one has on the "promise" of the government which could be a rather dramatic impact on what people would believe in the future. If it does happen, I'm guessing it would be a long way down the road, not in the next 10-15 years,
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Wild Bill shoulda taken more out of his IRA when he could have. . . .
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05-23-2011, 03:58 PM
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#24
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,714
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It makes sense to focus on the things one can control. Budget and spending, portfolio risk, investment expense levels. There will be plenty of time to worry about the other stuff later, especially new taxes.
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05-24-2011, 04:08 PM
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#25
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,186
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Quote:
Originally Posted by MichaelB
There will be plenty of time to worry about the other stuff later, especially new taxes.
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And there will be plenty to worry about, especially new taxes.
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"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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05-24-2011, 05:20 PM
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#26
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Moderator Emeritus
Join Date: Oct 2007
Location: Portland
Posts: 4,946
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Quote:
Originally Posted by youbet
And there will be plenty to worry about, especially new taxes.
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And falling asteroids. I don't wanna get smooshed!
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05-24-2011, 05:22 PM
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#27
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,714
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Quote:
Originally Posted by youbet
And there will be plenty to worry about, especially new taxes.
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If taxes were to return to the average they have held for the past 40 years (tax revenue % of GDP) I would be much less worried, not more.
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05-24-2011, 07:35 PM
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#28
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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Quote:
Originally Posted by Backpacker
Just a quick glance around the web and see in 2008 Roths accounted for less than 5% of all IRA funds.
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In my case, my Roth IRA is less than 5% of the size of my TSP (=401K) account, so I am not really worried about it.
Even if my Roth represented more of my net worth, I wouldn't be worried about it. I just don't think that Roths will ever be taxed. They are small potatoes in comparison with so many other possible targets to tax.
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Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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05-25-2011, 05:22 AM
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#29
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Recycles dryer sheets
Join Date: Mar 2011
Location: Brooklyn, NY
Posts: 197
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Taxes comes in many forms and shapes. Much like water and sewer bill, sin taxes, phone bill,... I concurred with many posters that government will find a way to pretty much tax Roth somehow with a fancy name disguising as taxes.
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The time to take counsel of your fears is before you make an important battle decision. That’s the time to listen to every fear you can imagine! When you have collected all the facts and fears and made your decision, turn off all your fears and go ahead! – General George S. Patton
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05-25-2011, 08:51 PM
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#30
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Recycles dryer sheets
Join Date: Aug 2005
Posts: 380
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to Quote Mark Twain "No ones life, liberty, or property is safe while the legislature is in session."
Imagine ending the income tax, and installing a large vat and larger gasoline tax.
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Retired -- 2001
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05-25-2011, 09:18 PM
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#31
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Thinks s/he gets paid by the post
Join Date: Jun 2007
Posts: 2,657
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I also believe it is a virtual certainty that Roth's will be taxed in some way. However, I also think it is likely that they will still be taxed favorably compared to other ways in which the assets could have been held. But since there can be no certainty about how future tax laws will be structured, my prudent approach is to not take any extreme position that counts on optimizing one scenario. By holding some Roth, some Traditional IRA and some taxable, I will not get the maximum benefit of unknowable future tax treatments, but I will hopefully also not get maximum exposure to any unfavorable development. My goal is not to maximize my holdings, my goal is to maximize the odds that my holdings will be enough.
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05-26-2011, 08:15 AM
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#32
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
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Quote:
Originally Posted by growing_older
I also believe it is a virtual certainty that Roth's will be taxed in some way. However, I also think it is likely that they will still be taxed favorably compared to other ways in which the assets could have been held. But since there can be no certainty about how future tax laws will be structured, my prudent approach is to not take any extreme position that counts on optimizing one scenario. By holding some Roth, some Traditional IRA and some taxable, I will not get the maximum benefit of unknowable future tax treatments, but I will hopefully also not get maximum exposure to any unfavorable development. My goal is not to maximize my holdings, my goal is to maximize the odds that my holdings will be enough.
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+1
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05-26-2011, 11:31 AM
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#33
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Thinks s/he gets paid by the post
Join Date: Jun 2007
Location: near Canadian border and near Mexican border
Posts: 1,142
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It sounds a bit like a sports game with Politicians vs the Taxpayers. However, rather than a neutral party setting the goal and the rules of the game, one of the competing teams get to make the determinations. If the Politicians are in the lead, the rules remain as originally determined. If the Politicians fall behind, they simply change the rules to their favor.
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Pigs get fat, hogs get slaughtered. That's my story and I am sticking to it.
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05-28-2011, 06:50 AM
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#34
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Thinks s/he gets paid by the post
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
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Yes.
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Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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05-29-2011, 06:04 PM
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#35
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Thinks s/he gets paid by the post
Join Date: Oct 2005
Posts: 4,898
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Recently,I heard David Stockman speak, in person, about the economy and his debt solutions and he said, twice, that "we have to find a way to tax people who spend out of their wealth." I was pretty surprised to hear that, and thought it sounded like an underhanded idea. I am pretty sure that he was referring to not only rich people who spend out of their wealth but retirees who spend their accumulated savings.
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05-29-2011, 08:13 PM
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#36
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Thinks s/he gets paid by the post
Join Date: Jul 2004
Posts: 1,434
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Quote:
Originally Posted by Oldbabe
I am pretty sure that he was referring to not only rich people who spend out of their wealth but retirees who spend their accumulated savings.
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That make no sense. Most retirees collect taxable dividends and people who have deferred savings are taxed at income rates. So who is the retiree that is spending savings that are not taxed? (I rather doubt that there are a lot of retirees out there with huge Roths at this time.) Then when they spend they have sales tax, etc.
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06-02-2011, 11:37 PM
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#37
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Recycles dryer sheets
Join Date: Jul 2008
Posts: 401
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Perhaps a more plausible sinister theory about Roths and taxation, and not one that might happen in the future, but one that IS happening now, is that all the financial press hype and tax incentives (such as suspending the AGI limits, allowing 2010 conversions to be taxed in 2011 and 2012, etc) is creating all this taxable income and tax revenue NOW. So it's effectively time-shifting future tax revenue to the present.
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06-07-2011, 11:26 AM
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#38
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Thinks s/he gets paid by the post
Join Date: Oct 2005
Posts: 4,898
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Quote:
Originally Posted by Tadpole
That make no sense. Most retirees collect taxable dividends and people who have deferred savings are taxed at income rates. So who is the retiree that is spending savings that are not taxed? (I rather doubt that there are a lot of retirees out there with huge Roths at this time.) Then when they spend they have sales tax, etc.
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You're right, of course. But then would Stockman be referring to the wealthy who have a lot of cash that they spend every year? If some sort of tax was initiated, then wouldn't the wealthy just find some hard assets to buy? His statement really puzzled me at the time and I've been trying to figure it out.
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06-07-2011, 09:45 PM
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#39
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,186
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Quote:
Originally Posted by Oldbabe
You're right, of course. But then would Stockman be referring to the wealthy who have a lot of cash that they spend every year? If some sort of tax was initiated, then wouldn't the wealthy just find some hard assets to buy? His statement really puzzled me at the time and I've been trying to figure it out.
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Oldbabe, you are correct in your take on Stockman's comments. The idea is to tax spending. A retiree holds one million bux. He/she spends, say, $30k of principal yearly with no tax due at the Fed level. Stockman would like to tax that spending. So you, Ms Retiree, cash in a CD to buy a car. Mr. Stockman would like that transaction to be taxed at the Fed level in addition to state and local sales taxes.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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06-10-2011, 08:26 PM
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#40
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Thinks s/he gets paid by the post
Join Date: Oct 2005
Posts: 4,898
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Quote:
Originally Posted by youbet
Oldbabe, you are correct in your take on Stockman's comments. The idea is to tax spending. A retiree holds one million bux. He/she spends, say, $30k of principal yearly with no tax due at the Fed level. Stockman would like to tax that spending. So you, Ms Retiree, cash in a CD to buy a car. Mr. Stockman would like that transaction to be taxed at the Fed level in addition to state and local sales taxes.
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Ah ha! I thought so. Isn't that double, maybe triple, taxation? What a dastardly plan! Let's hope that Mr. Stockman retires from his campaign before he does too much damage.
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