Rich to get super tax break - unlimited "ROTH IRA" non-taxable investment

[papau]

Legislation currently pending in Congress (already passed the House by a 244-85 vote, and expected to clear the Senate shortly) would eliminate income limits for those converting a traditional individual retirement account to a Roth beginning in 2010. Currently, singles and
married joint filers with adjusted gross incomes of up to $100,000 can convert one IRA to another. The change means that high-income individuals could open a traditional, nondeductible IRA - which has no income limits for eligibility - and then turn around and convert it to a Roth.

Investment returns from ANY investment that used that Roth money would then never be taxed - the rich GOP wet dream comes true!

[Sammy Pepys]

1. There's got to be more to that....

Any info on a bill number or bill title?

[stepnw1f]

2. DISGUSTING

Enjoy your tax giveaways motherfers....enjoy it all while it lasts...class warfare is here.

[Inland]

3. This is what makes Bush's tax breaks PERMANENT.

The rich simply move all their investiments into a Roth, pay today's taxes, so that no matter what the dems do with rates in the future, it's not reachable. NYT talked about this last week.

[Inland]

4. And pubs will use it to "prove" tax breaks means more revenue!

All the rich will move into Roths, pay more tax this year in exchange for next years'
double savings. Bush shows the one time bump as "proof", just as they use the one off cut in cap gains causing a one time spurt in sales as "proof".

Fucking assholes.

[Sammy Pepys]

5. I think we need to read the fine print on this folks...

Trad-to-Roth conversions are still taxed. That won't change.

Moreover, contribution limits are still intact. While there would be no income limit on the conversion....the income limits on contributions will remain.

[many a good man]

6. Current limits

Its $110,000 for singles and $160,000 for married couples.

More info here: http://www.sun-sentinel.com/business/local/bal-bz.roth11may11,0,5354597.story?coll=sfla-business-headlines

Article calls it a tax gimmick because it boosts revenue now at the expense of future years. If these people are already contributing to a conventional IRA, I don't see how this will raise additional revenue now.

[ticktockman]

7. Roth IRAs - a bad idea that will help to wreck our country's finances

Article calls it a tax gimmick because it boosts revenue now at the expense of future years. If these people are already contributing to a conventional IRA, I don't see how this will raise additional revenue now.

It will raise additional revenue now because the funds being moved from traditional IRAs to Roth IRAs will be taxed now rather than when they are withdrawn from traditional IRAs at retirement. This is why the Roth IRA is one of the most financially irresponsible ideas that the government has ever come up with. The following graph shows the government projections for Medicare and Social Security costs over the next 75 years:



The actual numbers and sources are at http://home.att.net/~rdavis2/pro2007.html . As can be seen, entitlement costs are projected to increase sharply. With traditional IRAs, the government was scheduled to receive increased revenues at just the right time to help pay for these costs. With Roth IRAs, however, the government will receive the revenues before they are desperately needed and will likely waste them on more tax cuts and increased spending. As with the federal debt, our children will be left holding the bill.

[anoraksia53]

8. and the revenue that comes in now will also be used

to slightly improve the financial figures but hidin what it means for the future.

More Enron-style tricks.

[many a good man]

9. Do rich people even contribute to IRAs?

Under the current rules you can't get a tax deferral on conventional IRAS if you are above the threshold . Are you even eligible for a Roth if your income is over the limit?

I wonder how many rich people even bothered to open IRAs under the current rules. The ones who didn't are probably kicking themselves now. Since they already paid taxes on the original contribution, I guess they'll at least be paying taxes on the gains so far.

IRAs probably represent a tiny fraction of the retirement savings for high income earners. However, passing it down tax free to heirs will create an even larger "leisure class" (there's some Thorstein Veblen for you!) The net result is a bankrupt public sector.

[ticktockman]

10. Roth IRAs - stupidity on stilts

Under the current rules you can't get a tax deferral on conventional IRAS if you are above the threshold . Are you even eligible for a Roth if your income is over the limit?

I wonder how many rich people even bothered to open IRAs under the current rules. The ones who didn't are probably kicking themselves now. Since they already paid taxes on the original contribution, I guess they'll at least be paying taxes on the gains so far.

IRAs probably represent a tiny fraction of the retirement savings for high income earners. However, passing it down tax free to heirs will create an even larger "leisure class" (there's some Thorstein Veblen for you!) The net result is a bankrupt public sector.

According to the chart titled "Deductibility of Traditional IRA contributions for 2005 IRA" at http://www1.evergreeninvestments.com/eicom/pub/content.go?k=900100038&c=Investment_Solutions::IRAs::IRA_Eligibility , contributions to traditional IRAs are fully deductible if neither you nor your spouse participates in a plan at work. Also, those who do participate in 401k plans at work often roll them into IRAs when they retire or move to another job. Once in a traditional IRA, those IRAs can then be converted into Roth IRAs. Hence, there's plenty of money in traditional IRAs out there, waiting to be converted once the limits are relaxed. We will then have an increase in revenues that will likely fuel additional tax cuts and spending. The bill for this party will be paid for by the next generation, the same ones who we are hoping will pay our Social Security and Medicare benefits.