Posted on 11/29/2012 11:20:58 AM PST by Perdogg
One of the earliest fears about tax-favored savings accounts like IRAs and 401(k) plans was that when this pool of savings grew large enough Congress would not be able to resist tapping it to help solve the nation’s debt problems. We’re about to find out if those fears—persistent for decades—have been justified.
Everything including the sacred mortgage deduction is on the table as lawmakers wrestle with the fiscal cliff, a year-end avalanche of scheduled spending cuts and tax increases. With a combined $10 trillion sitting in IRAs and 401(k) plans, retirement accounts make a juicy target. Some of this money has never been taxed, and under current law never will be.
(Excerpt) Read more at business.time.com ...
"I am willing to be corrected but that is a lie."
You are correct. It is a lie.
Also, tax deferred retirement savings are subject to taxation when passed on to a non-spouse beneficiary in death.
"The Tax Policy Center in Washington has found that about 80% of retirement savings benefits flow to the top 20% of earners".
This is non surprise, because higher earners can afford to save more, and are more likely to understand the concept of saving for retirement tax deferred.
I have a friend with a lucrative union pension. He thinks 401k's are something only rich CEOs get, and that it allows them to save an unlimited amount of money tax free.
The number of people who believe this, along with those who currently have access to 401k's and perhaps even contribute to 401k's but think "The Rich" get bigger and better 401k's is large enough for Obama for get away with confiscating a portion of 401k's.
And make no mistake, he will not go after Federal Government Employee TSPs, since Federal Government Unions are a big contributor to Obama.
Boy, that would be unpopular. And dumb.
You live where housing is cheap. In much of the country the mortgage deduction is huge—and yes, more huge for the upper-middle class.
I guess it depends on the specifics, but the AMT Patch, as they call it, manages to exempt most upper middle class people. But yea, you can still get tripped up if you have, say, $150k income, high property and state income taxes, and 6 kids. You may well wind up having to pay 10% or so in federal income taxes.
Dude, you really don't know what the heck you are talking about.
Seems to me that if you make $150k, then write off $50k (or split it with tax credits for the kids), that you wind up paying $17k in federal income tax, which is about 11%.
Seems to me that you should get a better accountant for next year.
Clue to fools after pension savings - Without a job one cannot say a damn thing!!!
Liar Kadlec! Larval, belly-crawling, Left-wing maggot journoliar -- "Congress" my ass, this is all your boy Barky's crap; he, not Congress, has been working on this for three years at least.
And yes, the sum at risk is $17 trillion for IRA's, Keoughs, 401(k)'s, and other tax-deferred savings accounts.
Communist Obamanation File.
Wow .... new coinages in Greek on FR! But .... shouldn't that be polypragmatistai? Or maybe polymathetai or polypraktikomathetai?
(Those are all nominative plurals, and masculine 1st-declension nouns.) 8p
In a Roth IRA, you are taxed on money you put in, but if the money you put in makes money, then that money is not taxed when you pull it out.
Ok, you earn 150 dollars, pay income tax, get 100 dollars and put it in a Roth. The 100 dollars invested in apple goes way up to 600 dollars. You get to withdraw 600 dollars tax free when you retire. Of course if you invested your roth in the old GM, and when it went to zero, you could not even use the 100 dollars loss as any kind of deduction or offset either.
In a roth IRA, you get no deduction for contributing but all gains in a roth are not taxed ever.
Unfortunately, all loses in a roth are not deductible or available for offset either.
“If 401k accounts are to be frozen, it will probably occur under the pretext of a crisis. But the crisis would have to be a real crisis like a major financial collapse or war. Freezing 401k accunts would likely result in a run by the public on all other accounts including bank accounts, stocks, bonds which would cause a crash and liely a freeze on these accounts as well.
Therefore, if the government is to do something like this, they will need to act suddenly, shut down the internet, censor the media and be ready to impose martial law where needed.
It is more likely that they will try out some very innocous seeming transition to tax deferred treasuries and gradually withdrawal the tax deferred status of 401ks and similar pension plans”
Pretty good reasoning.
The alternative is to immediately end any tax advantage to these accounts so you pay tax regardless of whether they are 401k or plain jane stock account.
It also happened to the Jap-Americans in 1942. They were given 2 weeks to sell everything before going off to camp. Needless to say, the prices they got were less than optimal.
All they have to do is make it taxable .... retro-active.
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