I don't get the indignation at the changes to the stretch IRA rules.
It is an INDIVIDUAL retirement account, with the intent to allow INDIVIDUALS to DEFER income taxes to benefit from deferral... presumably by paying less taxes (NOT NO TAXES) in retirement than if they didn't have this retirement savings opportunity and the income was taxed when earned.
It is solely a tax arbitrage play... even with growth since [1*(1-t)]*(1+i)^n = [1*(1+i)^n]*(1-t) if t is the same... it is only a benefit where your marginal tax rate in retirement is less than your marginal tax rate when you deferred the income.
I don't think that when the IRA was first established that it was intended to allow people to pass tax deferral benefits to their children and grandchildren. IMO it is an unintended consequence or loophole in the law that the Congress is now reigning in.
How many of you, when you first started deferring income into retirement savings, thought.... this is great, I'll be able to pass $$$$ onto my grandchildren and they'll get to defer taxes on it! I know that wasn't anywhere near my mind... it was the benefits to me and my spouse... not even my children.
So now, many years later, people are increasingly taking advantage of this loophole, encouraged by advisors to do so, and Congress is amending it to get back towards its original intent. Non-spousal beneficiaries will stretch over 10 years (House version) or the first $400,000 can be stretched over life and any remainder will be income over 5 years (Senate version). In both cases much better than being immediately taxable.
Both the INDIVIDUAL and their spouse still get the tax deferral benefits that were part of "the deal".
Our kids will be impacted by the changes to the stretch but to me that wasn't part of "the deal" to begin with so I have no objection to those changes. The change in RMD age from 70 1/2 to 72 is a bone thrown in to make the stretch changes more palatable.