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Taxing wealth a way to tax Roth IRAs?
09-11-2019, 05:44 PM
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#1
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,263
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Taxing wealth a way to tax Roth IRAs?
Some have proposed a tax on a person’s total net worth.
This sounds like a potential backdoor way to tax Roth accounts.
Or, am I turning into a cynical man of experience?
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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09-11-2019, 05:54 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Dec 2014
Location: St. Charles
Posts: 3,919
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Quote:
Originally Posted by Chuckanut
Some have proposed a tax on a person’s total net worth.
This sounds like a potential backdoor way to tax Roth accounts.
Or, am I turning into a cynical man of experience?
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Yes, you are turning cynical. And yes that is a way to tax Roth's, without taxing Roth distributions.
__________________
If your not living on the edge, you're taking up too much space.
Never slow down, never grow old!
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09-11-2019, 06:15 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Sep 2002
Posts: 1,178
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No doubt Roth’s are growing to a bigger target for the govt to tax. “Hey we need money just look at how much is setting over there. “ I can hear the arguments now “only the Wealthy have Roth’s, why don’t I have one? Blah blah blah”. Then we’ll see a greater consumption tax or something that hoses everyone. I’ll show them and just won’t spend my money. No matter what happens you can bet that someone else wants what you have. Just position yourself to play the hand that is dealt you and make the most of the opportunity when it arises.
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09-11-2019, 06:19 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,298
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Not sure how easily one's wealth can be measured by the gov't.
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TGIM
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09-11-2019, 06:21 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2007
Posts: 13,228
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Who are "some" and where have they proposed it?
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09-11-2019, 06:35 PM
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#6
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Full time employment: Posting here.
Join Date: Apr 2019
Posts: 630
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Quote:
Originally Posted by RunningBum
Who are "some" and where have they proposed it?
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Seriously? Elizabeth Warren. Publicly.
"Warren, currently holding the No.2 spot behind Joe Biden in an average of presidential polls, has proposed an annual 2% tax on every dollar of net worth above $50 million, and a 3% tax on each dollar of net worth above $1 billion."
https://www.marketwatch.com/story/he...ett-2019-09-10
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09-11-2019, 06:38 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2007
Posts: 13,228
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Quote:
Originally Posted by dirtbiker
Seriously? Elizabeth Warren. Publicly.
"Warren, currently holding the No.2 spot behind Joe Biden in an average of presidential polls, has proposed an annual 2% tax on every dollar of net worth above $50 million, and a 3% tax on each dollar of net worth above $1 billion."
https://www.marketwatch.com/story/he...ett-2019-09-10
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I hadn't been keeping up with all of the candidate campaign proposals/ideas. This is a far cry from taxing Roths for most of us.
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09-11-2019, 06:41 PM
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#8
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Full time employment: Posting here.
Join Date: Apr 2019
Posts: 630
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Quote:
Originally Posted by RunningBum
I hadn't been keeping up with all of the candidate campaign proposals/ideas. This is a far cry from taxing Roths for most of us.
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Sorry. I thought you were baiting. My bad. Cheers.
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09-11-2019, 06:43 PM
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#9
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Full time employment: Posting here.
Join Date: Jul 2013
Posts: 953
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I just received a text from Yang that he would give me $1000 each month. I think I will respond that he can forward that to Warren to pay for the wealth tax!
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Well it's all right, we're heading to the end of the line...
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09-11-2019, 06:48 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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France has had a wealth tax for 30 years. It is levied on assets above 800,000 euros, and the assets include all personal properties and financial accounts, with some exemptions for rural land, professional properties, etc...
Other countries had a wealth tax but abandoned it in recent years, such as Austria, Germany, Finland, Sweden, etc... Current French President Macron proposed abandoning the wealth tax, and faced violent demonstrations saying he favored the rich.
For wealth tax discussion for the US, Google is your friend. Beware of the little piggy though.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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09-11-2019, 06:50 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: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Just to give this discussion a chance and not seem too heavy handed, I just want to remind folks that our Community Rules don't allow for the invitation for political discussions of potential "wish list" legislation that is not far enough in the pipeline to even be a bill, let alone through committee and under serious consideration.
That said, the question, "What moves can I make to protect myself against the possibility of a wealth tax?" is risk management in financial planning, so if we keep partisan or ideological political commentary out of it and focus on how to manage our own nest eggs for potential risks, we'll be OK. If we can keep the context of the discussion within that framework, great. But this is only (possibly) a campaign promise, so there is no point in debating its merits or demerits.
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"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)
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09-11-2019, 07:30 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Jul 2007
Posts: 3,229
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Quote:
Originally Posted by ziggy29
That said, the question, "What moves can I make to protect myself against the possibility of a wealth tax?" is risk management in financial planning, so if we keep partisan or ideological political commentary out of it and focus on how to manage our own nest eggs for potential risks, we'll be OK.
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I'll be anxiously awaiting all the comments and strategies from those on this forum with a net worth of >$50M on how they plan to protect their nest egg.
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09-11-2019, 07:37 PM
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#13
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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
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1. Someone with more than $50M doesn't need "help" to figure out how to FIRE, and with that much money, you probably have a team of accountants and lawyers at your disposal.
2. Someone with more than $50M, unless they picked the right stocks, probably has a small percentage of their net worth in Roth investments.
3. Someone with more than $50M is not going to have an early retirement busted by taxes.
__________________
"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)
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09-11-2019, 07:41 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: Jul 2008
Location: Leeward Oahu
Posts: 17,915
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Yep, I've already discounted the effects of "wealth tax" as ANY current proponent has laid out. Those who 'would' be affected are too smart to ever pay it. The rest of us don't qualify. Having said that, the "real" money (tax or otherwise) must, by definition be within the middle class (not political, just fact.) Thats where "we" (the FIRE community) need to stay alert. I'll leave it at that, much as I love bacon. YMMV
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Ko'olau's Law -
Anything which can be used can be misused. Anything which can be misused will be.
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09-11-2019, 07:42 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Jul 2007
Posts: 3,229
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Quote:
Originally Posted by ziggy29
1. Someone with more than $50M doesn't need "help" to figure out how to FIRE, and with that much money, you probably have a team of accountants and lawyers at your disposal.
2. Someone with more than $50M, unless they picked the right stocks, probably has a small percentage of their net worth in Roth investments.
3. Someone with more than $50M is not going to have an early retirement busted by taxes.
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I guess I should have use the sarcastic emoji instead of the smiley.
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09-11-2019, 07:43 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: Jul 2008
Posts: 35,712
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Quote:
Originally Posted by Koolau
Yep, I've already discounted the effects of "wealth tax" as ANY current proponent has laid out. Those who 'would' be affected are too smart to ever pay it. The rest of us don't qualify. Having said that, the "real" money (tax or otherwise) must, by definition be within the middle class (not political, just fact.) Thats where "we" (the FIRE community) need to stay alert. I'll leave it at that, much as I love bacon. YMMV
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Yes, the French got it figured out. Hence the exemption limit is just 800,000 euros.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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09-11-2019, 07:46 PM
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#17
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Thinks s/he gets paid by the post
Join Date: Jan 2013
Posts: 3,413
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I believe the likelihood of some kind of wealth tax is significant and growing.
I also believe that once it's enacted, there will be a plethora of tax attorneys, financial advisers, and insurance salespeople competing to sell you ways to minimize or avoid the wealth tax.
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09-11-2019, 07:46 PM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,263
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Quote:
Originally Posted by RunningBum
I hadn't been keeping up with all of the candidate campaign proposals/ideas. This is a far cry from taxing Roths for most of us.
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Agreed. It is a far cry. My concern is that it opens a back door to taxing Roths indirectly. And the minimum wealth needed to pay the tax will go down over the years.
FWIW, the sales tax where I live used to be about 7.5%. It is now 10%. These taxes have a way of going up and not going down.
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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09-11-2019, 07:49 PM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,373
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Quote:
Originally Posted by RunningBum
I hadn't been keeping up with all of the candidate campaign proposals/ideas. This is a far cry from taxing Roths for most of us.
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+1 even though I would oppose a wealth tax in principle.... I presume that these people with $50 million+ or $1 billion+ pay income tax already... so they pay income tax on their income and then it gets taxed again becaue it is part of their wealth?
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If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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09-11-2019, 07:58 PM
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#20
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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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Even if it started at $50,000,000 do you really believe it would never get lowered?
In 1913 (when the 16th amendment was ratified), the top tax bracket was 7 percent on all income over $500,000 (roughly $12 million in today’s dollars).
Funny how that didn't stick.
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