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Old 03-13-2014, 08:15 AM   #21
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This seems like an overly complicated way of addressing what is really a very specific problem.

We need to stop letting private equity folks put 10s of millions of dollars worth of private stock into IRAs by claiming it is worth almost nothing.

Enforcing account size limits because someone happened to luck out and buy Netflix in their IRA seems like a whole lot of red tape for almost no revenue gain.

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Old 03-13-2014, 09:45 AM   #22
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IRAs and tax-deferred retirement vehicles are relatively new (anything that I can remember starting in my lifetime falls in the relatively new column). Here is a 2011 history: Deduct This: History of the IRA Deduction - Forbes

If we had to completely lose the tax break (which I think is really not a break for the traditional IRA, just a postponing of paying taxes on the earnings and for many of us the contributions we made to these accounts), we would probably still be saving for retirement. We would just be "prepaying" the taxes like we do on other savings. The idea of capping retirement accounts doesn't bother me (there have been many refinements of these accounts since the first ones were available in 1975, yet we seem to have all survived them), although I don't see a lot of reports that this is actually on the verge of happening. If it does, it will also go into the relatively new column for me, and then something else will be changed....

If government kept its hands off our money, IRAs would not have been created.

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Old 03-13-2014, 09:19 PM   #23
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Originally Posted by bUU View Post
How much income that you've derived from society's economy which you shelter from taxation by society is society's business.

No it is NOT. It is my money not society's money, I earned it not society. That's a socialist concept, not a capitalist concept. My money is mine not yours or the "village's" or the govt's at least until taxes are due. If I want to put millions into tax advantaged account that's my business and no one should be able to limit it.
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Old 03-13-2014, 10:17 PM   #24
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I disagree. You can do what you want with your money, but when society decides to subsidize some activity (example contributing to a retirement account) with a tax break, then it is also reasonable to put some kind of limit on how much of that is willing to be subsidized. Are you saying it is nobody's business how much you put in your IRA, so you should be able to contribute above the current $5500 limit?

I think the abusive valuation that allows private equity folks to contribute restricted stock at supposedly near zero and then end up with millions in a tax free account should be prohibited. Likewise I think it's reasonable to decide that the favorable tax treatment to encourage low income workers to contribute to their savings will phase out at some income level. Putting a cap on retirement savings above which future contributions are not given tax breaks is logically the same as many other phase outs in the tax code. You may agree or disagree with the laws, but there's nothing fundamentally different about this limit.

None of these plans are saying you cannot have more than X saved. Only that if you have more than X saved then you no longer qualify for tax deductible treatment on further contributions.
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Old 03-14-2014, 05:03 AM   #25
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Originally Posted by veremchuka View Post

No it is NOT.
WOW! Yes it is. Get over it. You earned income from society's economy.

Originally Posted by growing_older View Post
None of these plans are saying you cannot have more than X saved. Only that if you have more than X saved then you no longer qualify for tax deductible treatment on further contributions.
Precisely. In this case, the tax advantage would be acknowledged for what it is, an incentive to save, something which people over a certain amount of assets have determined they're going to do anyway. Disney sends PIN codes out now to secure access to special discounts at their theme parks, leveraging what they know about the prospective customer to gauge how likely they would be to visit without a discount and thereby limiting the discounts as well as possible to those who would not visit without the discount. America has the same right (and really: responsibility) to target the incentives built into the US code so as to benefit American citizens as Disney has built into their pricing model to benefit their shareholders, even though some of those shareholders may be rich vacation-goers.
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Old 03-14-2014, 05:47 AM   #26
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Once again, I suspect that a couple with over $6MM in an IRA/tax deferred account have legal "options" that will circumvent anything our congress can put in place.

It feels good to say that everyone will pay their fair share, but as I've often stated, the rich have options. I don't think they're losing any sleep over this one.
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Old 03-14-2014, 07:29 AM   #27
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Where's Porky when you need him? Nothing like a thread where the parties are debating two different topics altogether...
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Old 03-14-2014, 01:31 PM   #28
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Time to close out this stimulating discussion.
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