Posted on 06/24/2010 10:35:02 AM PDT by Qbert
Congress wouldn't tax Roth IRAs, would it?
It is a burning question for thousands of taxpayers now deciding whether to pay taxes to convert their regular individual retirement accounts to Roth accounts. All taxpayers are eligible to make the switch, because this year the income limit of $100,000 was permanently repealed. Many have done so already: Fidelity Investments says that as of May 31, the firm had handled 87,000 Roth conversions this year, about four times the number for the same period last year.
But dozens of less-convinced readers have asked Tax Report about Congress's intentions, and well-known IRA expert Ed Slott says he hears it from consumers and advisers every time he makes a speech: "'If I pay tax to convert my IRA,' they ask, 'how do I know Congress won't turn around and take away the benefits?'"
Calculating the Odds
These wary citizens are trying to calculate the odds of making a move they will regret, since lawmakers are wrestling with debt and deficits of epic proportions. President Obama has repeatedly called for higher taxes on top earners, and lawmakers have broken new tax ground several times this year already. A 3.8% Medicare tax on high earners' investment income has passed already, and heftier taxes on Subchapter S firms and the "carried interest" of investment partnerships appear imminent.
So are higher taxes on Roth accounts also on the way?
Without a crystal ball, it is impossible to answer the question definitively. But the short answer appears to be: "No, Congress won't tax Roth conversions, at least not soon." And the prospect of longer-term changes isn't deterring experts who are converting their own accounts.
(Excerpt) Read more at finance.yahoo.com ...
Of course not. Not Roths, not your 401K, nothing is.
Thanks for the post...BTW...welcome to FR.
When the government is involved, no one and nothing is safe.
“Thanks for the post...BTW...welcome to FR.”
Thanks!
In God we trust - in Congress, never. They will change every law it takes to seize whatever money they want.
When Congress is in session, neither your liberty nor your property are safe.
It’s a question I’ve pondered as well. Thanks for posting this. I DO believe that when the houses of the usurpers are cleaned in November and again in 2012, the newly elec ted won’t going there to change those rules. The tribe that’s in there now? No one trusts this government. And it will be a long time, if ever, that the people will become so complacent as to ever put its trust in them again. And they brought this oon themselves. May they be miserable for the rest of their filthy lives. And that’s the nicest thing I can say about them
“No man’s life, liberty, or property are safe while the congress is in session.” Mark Twain
Of course there will be taxes on Roth. Obama never saw a tax he didn’t like. If you have enough money to save for retirement, then you are more ‘fortunate’ than those who sat on their a**es waiting for their checks. In the dictator’s eyes, the wealth (everyone else’s anyway) should be spread around.
The government can change the rules of any game at any time. Especially when taxes are involved. They can also take control of any assets you have at any time. I believe they call it confiscation...
“When the government is involved, no one and nothing is safe.”
Yeah, I hear that. I remember when reconciliation was first discussed as a means for passing Obamacare. Lots of pundits said that the Dems would never try to take over 1/6 of the nation’s economy that way. And we all know how that one turned out...
These will be safe enough until the pot is big enough to be attractive to Congress; then the rich holders of these accounts will be demonized, despite the fact that they paid a conversion tax up front for a defined tax structure, and the benefits will be ratcheted down. I bet the first thing to go is the lack of taxation upon death. Next will be the arbitrary setting of minimum and maximum withdrawal rates, with obscure rules and large penalties. Wait and see... I'd say about 15 years.
I’d be equally if not more worried that they would outright confiscate it in its entirety. Don’t worry, you’ll be given a fancy piece of paper as a receipt. Well, maybe be told there is a fancy piece of paper in a file cabinet in a West Virginia building named after Byrd. Whaddaya mean, which one?
Don’t trust these marxists. They are drooling over all the money that you worked for all your life without asking for a dime. They want it. They want to rip it from your hands and give it to people who vote democrat.
I doubt there ever will be direct tax on ROTH.
Indirect taxes are another thing.
For example, if you have a big assets in ROTH, you are considered “rich” and gets unfavourable treatment in tuition/college aid for your kids (you will pay full tuition while illegals get it for free), your Social Security will be mean-tested, some tax deductions will be eliminated, your health care cost will be higher etc. So, dems can claim that ROTH is not taxed.
Seriously, I use to niavely for many years think my 401K was safe from the government as long as I paid the taxes due on it as I use it. Now with me close to being able to retire and all the underlying discussion about the government looking for ways to confiscate everyone’s 401K (and I would suspect Roth’s as well), I can see just how blind I was to the evil ways of government to confiscate what many of us have worked many years to accumulate to take care of ourselves and our families.
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