Comments on: A Brief Look at the Latest Tax Bill http://allfinancialmatters.com/2006/05/10/a-brief-look-at-the-latest-tax-bill/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Fri, 20 Nov 2009 19:56:44 -0800 http://wordpress.org/?v=abc hourly 1 By: Anonymous http://allfinancialmatters.com/2006/05/10/a-brief-look-at-the-latest-tax-bill/comment-page-1/#comment-4589 Anonymous Fri, 12 May 2006 17:21:12 +0000 http://allthingsfinancialblog.com/2006/05/10/a-brief-look-at-the-latest-tax-bill/#comment-4589 Ouch! The real meaning of what they are considering with IRA conversions to Roths is scary. The federal government is running a deficit right now. One way to get tax dollars today without anyone complaining too much is to allow people to voluntarily pay the taxes on their retirement savings now by converting traditional IRAs to Roths. That means that the tax revenue for that income is available to them now. It won't be available when we retire. I don't believe for a second that our government is going to suddenly develop a deep sense of fiscal responsibility and bring spending down to the level of income. Instead, they will spend the extra money now, continue to run deficits and find other ways to tax us when we're old and gray. The worst part of this is that our current crop of legislators have no intension of letting us pay the income tax on that money now only to take it away from us in sales taxes, property taxes, fees, wealth taxes, etc. later. They aren't planning to raise our taxes in any way when the bill comes due. They are planning to retire before it becomes their problem. Yes, I think we should consider converting traditional IRAs to Roths. I love the idea. I've done it with one myself. However, I want to see a balanced federal budget, real social security and welfare reform, and a serious cutback on pork. Ouch! The real meaning of what they are considering with IRA conversions to Roths is scary. The federal government is running a deficit right now. One way to get tax dollars today without anyone complaining too much is to allow people to voluntarily pay the taxes on their retirement savings now by converting traditional IRAs to Roths.

That means that the tax revenue for that income is available to them now. It won’t be available when we retire. I don’t believe for a second that our government is going to suddenly develop a deep sense of fiscal responsibility and bring spending down to the level of income. Instead, they will spend the extra money now, continue to run deficits and find other ways to tax us when we’re old and gray.

The worst part of this is that our current crop of legislators have no intension of letting us pay the income tax on that money now only to take it away from us in sales taxes, property taxes, fees, wealth taxes, etc. later. They aren’t planning to raise our taxes in any way when the bill comes due. They are planning to retire before it becomes their problem.

Yes, I think we should consider converting traditional IRAs to Roths. I love the idea. I’ve done it with one myself. However, I want to see a balanced federal budget, real social security and welfare reform, and a serious cutback on pork.

]]> By: jack http://allfinancialmatters.com/2006/05/10/a-brief-look-at-the-latest-tax-bill/comment-page-1/#comment-4118 jack Thu, 11 May 2006 10:56:51 +0000 http://allthingsfinancialblog.com/2006/05/10/a-brief-look-at-the-latest-tax-bill/#comment-4118 I hate to be a pessimist, but Why do you think the gov't requires brokerages, mutual funds, etc. to report the value of your retirement account to the IRS? There's no way they're going to keep their hands off of your retirement savings when they'll be so many people who "need" help and you've been lucky in the lottery of life... I've decided against opening a Roth for these very reasons and utilize a traditional and 401k. Time will tell if I've made the right decision. I hate to be a pessimist, but

Why do you think the gov’t requires brokerages, mutual funds, etc. to report the value of your retirement account to the IRS?

There’s no way they’re going to keep their hands off of your retirement savings when they’ll be so many people who “need” help and you’ve been lucky in the lottery of life…

I’ve decided against opening a Roth for these very reasons and utilize a traditional and 401k. Time will tell if I’ve made the right decision.

]]> By: Making Our Way http://allfinancialmatters.com/2006/05/10/a-brief-look-at-the-latest-tax-bill/comment-page-1/#comment-3965 Making Our Way Thu, 11 May 2006 02:32:02 +0000 http://allthingsfinancialblog.com/2006/05/10/a-brief-look-at-the-latest-tax-bill/#comment-3965 wow, ciwood, you raise a good point that congress can change the tax free nature of roth accounts in the future at their (well at the majority's whim). we need an ammendment to protect our tax free accounts!! have a wonderful day, makingourway wow, ciwood, you raise a good point that congress can change the tax free nature of roth accounts in the future at their (well at the majority’s whim).
we need an ammendment to protect our tax free accounts!!
have a wonderful day,
makingourway

]]> By: ciwood http://allfinancialmatters.com/2006/05/10/a-brief-look-at-the-latest-tax-bill/comment-page-1/#comment-3866 ciwood Wed, 10 May 2006 17:09:46 +0000 http://allthingsfinancialblog.com/2006/05/10/a-brief-look-at-the-latest-tax-bill/#comment-3866 Social security payments were tax free at first. This conversion window is a red herring allowing Congress to collect taxes on the conversion and then years later, means test ROTH Ira income and begin to tax Roth IRA income above a certain limit. If you convert, you will pay taxes now and probably pay taxes later. Never convert all of your IRA. Keep both a classic IRA and a Roth IRA to maintain the flexibility you will need to fight the changes in taxes Congress will throw at you in the future!! Social security payments were tax free at first. This conversion window is a red herring allowing Congress to collect taxes on the conversion and then years later, means test ROTH Ira income and begin to tax Roth IRA income above a certain limit. If you convert, you will pay taxes now and probably pay taxes later. Never convert all of your IRA. Keep both a classic IRA and a Roth IRA to maintain the flexibility you will need to fight the changes in taxes Congress will throw at you in the future!!

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