|
|
Are you worried that Congress may tax Roth IRA's in the future?
05-13-2011, 02:11 AM
|
#1
|
gone traveling
Join Date: Oct 2009
Posts: 125
|
Are you worried that Congress may tax Roth IRA's in the future?
It seems that Ireland is doing just that. Won't a cash strapped Congress having a large lower class (because the middle class will have been destroyed) and a large senior cohort screaming for Medicare decide to go after this pot of cash rather than raise upper income tax rates to confiscatory levels?
Roth IRAs: Safety in Numbers? - Megan McArdle - Business - The Atlantic
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
05-13-2011, 02:42 AM
|
#2
|
Recycles dryer sheets
Join Date: Mar 2011
Location: Brooklyn, NY
Posts: 197
|
What a horrible thought! Anything is possible and future is uncertain. However, there will some angry mob if it happens here.
__________________
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
|
|
|
05-13-2011, 03:19 AM
|
#3
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2006
Posts: 7,733
|
I don't think they will directly but indirectly it is a possibility. For example many decades ago Muni bond interest was not considered income for any purposes. Now it is counted in things such as income for figuring out what portion of your SS benefits are taxable as income. I believe it has impact on some types of AMT calculations but I don't know the details.
I suspect that when it comes to means testing seniors for Medicare or SS, in the future Roth withdrawals will be included in the calculations somehow.
|
|
|
05-13-2011, 08:28 AM
|
#4
|
Thinks s/he gets paid by the post
Join Date: Jul 2004
Posts: 1,558
|
Yes
__________________
Deserat aka Bridget
“We sleep soundly in our beds because rough men stand ready in the night to visit violence on those who would do us harm.”
|
|
|
05-13-2011, 08:32 AM
|
#5
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2007
Posts: 7,746
|
Worried? No. Will it happen? Maybe. Perhaps not explicitly. I doubt it will be counted in your income on your 1040 tax return (maybe for AMT though?). But in our world of public handouts, it may be considered income for purposes of calculating your eligibility for handouts (SS, medicare, health insurance subsidy, etc). Or subject to a wealth tax.
And if a national VAT is ever implemented, your Roth dollars will be taxed more than now.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (8, 13, and 15).
|
|
|
05-13-2011, 08:37 AM
|
#6
|
gone traveling
Join Date: May 2011
Location: Portland
Posts: 133
|
It is the main reason we are not going overly aggressive to convert existing IRA accounts to Roth accounts, even with the income limit restriction removed. Sure, paying 30% now might be better than paying higher taxes later, but you are placing a lot of trust that the game rules will not be changed.
|
|
|
05-13-2011, 08:50 AM
|
#7
|
Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
|
I vote with "not directly, but could be included in benefit eligibility or graded Medicare premium calculations".
But, I'm not "worried" in the sense that I'm concerned a tax on Roth withdrawals would make it hard for us to cover our basic spending.
|
|
|
05-13-2011, 08:54 AM
|
#8
|
Moderator Emeritus
Join Date: Sep 2007
Posts: 17,774
|
More likely imho that there would be a tax on new contributions/new accounts than to existing balances.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
|
|
|
05-13-2011, 09:17 AM
|
#9
|
Thinks s/he gets paid by the post
Join Date: Jul 2004
Posts: 1,434
|
VAT, Sales, Excise, Means, Tolls, Fees, Sins, Property, Medicare mod, ..... Gee, they really don't need to direct tax it as income to siphon a bit back to the Treasury (fed and state/local). They can use new taxes and tax code. I guess I still would bet on the Roth for better results.
|
|
|
05-13-2011, 12:10 PM
|
#10
|
Thinks s/he gets paid by the post
Join Date: Oct 2008
Posts: 2,796
|
Yes. And I fear that they will sneak in a "VAT" at the wholesale level, which will increase prices, and be called "inflation".
|
|
|
05-13-2011, 12:38 PM
|
#11
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
|
Directly, it won't happen IMO. Indirectly it's possible, especially if Roth income is included in income for the purpose of entitlement means testing in the future, and if the federal government moves to less dependence on income tax and more dependence on sales and use taxes. Both of these would make a Roth a worse deal than now, and neither would directly trigger income taxes on the Roth distributions themselves.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
|
|
|
05-13-2011, 01:19 PM
|
#12
|
Moderator Emeritus
Join Date: Oct 2007
Location: Portland
Posts: 4,946
|
Specifically, the Irish proposal is a wealth tax, a tax on intangible property held in personal pension accounts:
Quote:
The various tax reduction and additional expenditure measures which I am announcing today will be funded by way of a temporary levy on funded pension schemes and personal pension plans. I propose that the levy will apply at a rate of 0.6% to the capital value of assets under management in pension funds established in the State.
|
Ouch. 0.6% of principal taxed away every year. That'll teach you to save for old age.
Funds from the pension levy will be used to offset tax cuts elsewhere and fund part of a new jobs plan. The levy does not apply to public service pensions.
|
|
|
05-13-2011, 01:24 PM
|
#13
|
Moderator Emeritus
Join Date: Oct 2007
Location: Portland
Posts: 4,946
|
I've gotta admit, the idea of seeing a cut in my top tax bracket rate balanced/funded by a levy on 'fat cat pensioners' does have a certain appeal. The entertainment value would be pretty high...
|
|
|
05-13-2011, 02:33 PM
|
#14
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
|
Doubtful, most folks don't do Roths anyways. There are MUCH EASIER ways for the govt to squeeze us. Just let the tax cuts expire in 2 years and "voila"..........
__________________
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).......:)
This Thread is USELESS without pics.........:)
|
|
|
05-13-2011, 02:47 PM
|
#15
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
|
Quote:
Originally Posted by FinanceDude
Doubtful, most folks don't do Roths anyways. There are MUCH EASIER ways for the govt to squeeze us. Just let the tax cuts expire in 2 years and "voila"..........
|
That one is in the bag. But I don't expect them to stop there.
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
|
|
|
05-14-2011, 06:09 PM
|
#16
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,674
|
Quote:
Just let the tax cuts expire in 2 years
|
I doubt that President Trump would let that happen.
__________________
Part-Owner of Texas
Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx
In dire need of: faster horses, younger woman, older whiskey, more money.
|
|
|
05-14-2011, 06:36 PM
|
#17
|
Thinks s/he gets paid by the post
Join Date: Aug 2006
Posts: 2,433
|
Why would this surprise you? It was done in 1992 when the maximum amount of SS subject to taxes was raised from 50% to 85%.
__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
|
|
|
05-14-2011, 09:04 PM
|
#18
|
Thinks s/he gets paid by the post
Join Date: Oct 2010
Location: irradiated - too close to the nuclear furnace
Posts: 1,294
|
Worried, no. Do I suspect they might try this, yes.
I wouldn't put anything past these bastards, oops did I say that?
All the more reason no Roth conversions for me.
|
|
|
05-14-2011, 11:10 PM
|
#19
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
|
If they did it, they probably would not do it directly.... it would be some complex scheme to increase taxes on some other income like SS (100% of SS is taxes instead of 85%).
I think a more likely event would be to increase taxes some other way. Look for part of the tax solution to be an increase in FICA.
But who knows what might end up being shoved into the AGI calculation that determines one's marginal income tax bracket.
There is not going to be a great (no cost) solution... there will be shared pain!
|
|
|
05-23-2011, 07:07 AM
|
#20
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
|
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.
__________________
Retired early, traveling perpetually.
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|