MasterBlaster
Thinks s/he gets paid by the post
- Joined
- Jun 23, 2005
- Messages
- 4,391
Serious tax question without meaning to cast aspersions on anyone:
For folks suggesting that Roths, for example, might lose some of their tax exempt status in the coming years or decades, are there examples from recent U.S. tax law history that suggest the government might take away favorable tax treatment of these type accounts. In other words, if one were to act in reliance on the promise from the government that a certain account type (or other long-term, non-revocable money decision) would be tax exempt/tax favored going forward, has one been disappointed by the government changing their position after the fact? Have promises been broken?
There is historical precident for taxation of "excess" IRA distributions. Before 1997 if you took more than what was deemed to be a "reasonable" amount out of your IRA, then you were hit up for an extra 15% excise tax. This was on top of any income taxes owed on that amount.
So something along those lines is certainly possible for a Roth IRA. Keep that in mind as you do your lifetime planning. Perhaps the concept of several independent accounts or streams of income is the way to go for tax diversity.