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Does Obama's Currently Proposed Tax Changes Affect Us?
02-01-2015, 11:20 AM
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#1
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Recycles dryer sheets
Join Date: Feb 2010
Posts: 429
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Does Obama's Currently Proposed Tax Changes Affect Us?
Hi. I was just wondering if Obama's currently proposed tax changes will affect those of us who are either close to entering early retirement or who have recently entered into early retirement.
I know that he was proposing raising taxes on 529 accounts, but that he recently dropped that proposal. That personally would not have affected me, but are there other proposals that would likely have a positive/negative effect on our ability to FIRE?
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02-01-2015, 11:23 AM
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#2
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,714
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Quote:
Originally Posted by nico08
but are there other proposals that would likely have a positive/negative effect on our ability to FIRE?
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Is there a specific proposal you wish to discuss?
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02-01-2015, 11:24 AM
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#3
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Moderator Emeritus
Join Date: Oct 2007
Location: Portland
Posts: 4,946
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Quote:
Originally Posted by nico08
Hi. I was just wondering if Obama's currently proposed tax changes will affect those of us who are either close to entering early retirement or who have recently entered into early retirement.
I know that he was proposing raising taxes on 529 accounts, but that he recently dropped that proposal. That personally would not have affected me, but are there other proposals that would likely have a positive/negative effect on our ability to FIRE?
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No impact.
Please bear in mind that proposals are just that, and are unlikely to survive the first committee meeting that they are presented at. Anyone may contact their elected representatives and make a proposal.
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02-01-2015, 11:36 AM
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#4
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Recycles dryer sheets
Join Date: Feb 2010
Posts: 429
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Hi. I am not familiar with all of his proposals, but I thought he was proposing something about increasing taxes on capital gains and dividend income, and I thought that could affect us.
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02-01-2015, 11:43 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Location: The Beautiful Blue Ridge Mountains
Posts: 2,791
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Quote:
Originally Posted by nico08
Hi. I am not familiar with all of his proposals, but I thought he was proposing something about increasing taxes on capital gains and dividend income, and I thought that could affect us.
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According to Reuters, this would apply to couples earning $500k or more. If that impacts "us" I'm in the wrong crowd.
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02-01-2015, 12:08 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,891
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Quote:
Originally Posted by nico08
Hi. I am not familiar with all of his proposals, but I thought he was proposing something about increasing taxes on capital gains and dividend income, and I thought that could affect us.
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As M Paquette said, what any President 'proposes' means little. Laws start, and must get through Congress.
The President has veto power (but that just stops things, different than pushing an agenda - except as a bargaining chip). And a 'proposal' might help get public support, people can then push Congress to present laws for POTUS signature.
If the earlier Congresses didn't already pass tax increases like this, it seems unlikely that the present Congress will. I think the proposals are just 'posturing' for political gain among the base.
-ERD50
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02-01-2015, 12:18 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
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Looking at the Reuters' link, none of them impact me.
But, that hardly matters. Given DC politics, Obama proposals are DOA in the House.
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02-01-2015, 12:42 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Feb 2012
Location: Northern Ohio
Posts: 3,182
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I agree that there is little chance any of the proposed new taxes from the President will have any any chance of passing this congress, but they do serve two purposes:
1. Feed the base
The proposals make many of the President's core supporters happy
2. Trial balloons
It gets these ideas in front of people to see the reaction. For example:
The 529 proposal generated a lot of opposition and was quickly backed away from. Good news (IMHO) in that it would set a precedent for monkeying with tax privileged accounts. Having the government make substantial changes to IRAs is a concern of many here.
One that didn't get much attention was the proposed changes to the estate tax. He proposed lowering the exemption from $5.25M to $3.5M. This would have impact on many in this forum, especially when planning how to deal with surviving spouses. It would bring back the need for AB trusts for many.
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02-01-2015, 01:51 PM
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#9
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Recycles dryer sheets
Join Date: Feb 2013
Location: Morton
Posts: 56
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Last year he was going to take away the spousal benefit because rich people don't need them. That went no where.
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02-01-2015, 01:57 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Dec 2014
Posts: 2,511
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one of the proposals was something that was in the news before this latest round of proposals... that is requiring RMDs from Roth accounts. Again... likelihood of survival?
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02-01-2015, 01:57 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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Quote:
Originally Posted by Brooks Saddle
Last year he was going to take away the spousal benefit because rich people don't need them. That went no where.
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I've found that just some occasional flowers and kind words helps the spousal benefits.
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02-01-2015, 02:50 PM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,588
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One trial balloon was to require MRDs from Roths. Any news on that one?
__________________
I have outlived most of the people I don't like and I am working on the rest.
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02-01-2015, 05:37 PM
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#13
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Moderator Emeritus
Join Date: Oct 2007
Location: Portland
Posts: 4,946
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Nobody's proposals affect us as early retirees.
Proposals are not even worth bothering with unless they actually make it to the House floor. Before that, they're just grist for the Sunday Morning Parade of Talking Heads and filler for cable news.
Ignore them, or send a letter to your favorite Congresscritter if that makes you feel better.
Sent from my iPad using Early Retirement Forum
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02-01-2015, 07:05 PM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2009
Posts: 9,343
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Quote:
Originally Posted by M Paquette
Nobody's proposals affect us as early retirees.
Proposals are not even worth bothering with unless they actually make it to the House floor. Before that, they're just grist for the Sunday Morning Parade of Talking Heads and filler for cable news.
Ignore them, or send a letter to your favorite Congresscritter if that makes you feel better.
Sent from my iPad using Early Retirement Forum
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With more "free time" in retirement I have to guard myself against worrying about things I wouldn't have if I was busy working and running around with my hair on fire. I have as much income now than I had when working, yet I watch my budget more even though it was no problem while working without one.
Although I am not as bad as my friends Dad is. He watches Fox News 24/7 and has become convinced ISIS terrorists are going to hit his small Midwest town of 1200 people in the middle of nowhere!
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02-01-2015, 07:10 PM
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#15
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Moderator
Join Date: Dec 2007
Location: Eastern WV Panhandle
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Quote:
Originally Posted by Mulligan
Although I am not as bad as my friends Dad is. He watches Fox News 24/7 and has become convinced ISIS terrorists are going to hit his small Midwest town of 1200 people in the middle of nowhere!
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Now there is a guy who needs to go down to the pound, take in a homeless puppy or dog, and take him for a walk three or four times a day instead of watching TV!
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When I was a kid I wanted to be older. This is not what I expected.
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02-01-2015, 07:20 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2009
Posts: 9,343
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Quote:
Originally Posted by Walt34
Now there is a guy who needs to go down to the pound, take in a homeless puppy or dog, and take him for a walk three or four times a day instead of watching TV!
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I know "my world" has shrunk somewhat since retirement. But I need to still be vigilant in making sure I do not become like that!
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02-01-2015, 07:35 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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Quote:
Originally Posted by Mulligan
I know "my world" has shrunk somewhat since retirement. But I need to still be vigilant in making sure I do not become like that!
Sent from my iPad using Tapatalk
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It's sort of odd though. His world hasn't shrunk - since he's attached to news programming and feels like what's happening overseas as shown on TV could be next door.
It's more like he's disconnected from his immediate surroundings and is living inside his (international) TV!
If people get more involved in what is happening locally - whether getting out and enjoying parks and wildlife or more organized activities involving other people - what is happening in the "bigger world" as shown on TV becomes less important, and certainly less immediate.
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Retired since summer 1999.
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02-01-2015, 08:18 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Feb 2011
Posts: 1,797
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But many here could be adversely affected by the expanded cap gains tax assessment for non-spousal inheritance (>$200k cap gains, >$500k homes, and, according to Reuters, ALL "personal property"). Folks would have to pay those CG taxes now (vs when selling the property) if they inherited Uncle Joe's car, coin collection, family vacation cabin, etc. It would be a damn shame to be forced to sell a family heirloom (e.g. jewelry item) due to an immediate CG tax liability
But as has been said, these are not serious proposals as they will go no where in the House or Senate.
IMHO- These proposals are quite sad. We really do need a major overhaul of our bloated and illogical tax code, but these "play to the base" proposals did nothing but further polarize the situation.
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02-01-2015, 08:29 PM
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#19
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Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,128
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Thanks folks for a lively discussion on things that will never happen.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
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