Skip to comments.Roth IRAs: A real 'fiscal Frankenstein' (LIBERALS ARE COMING FOR YOUR RETIREMENT SAVINGS)
Posted on 04/11/2011 5:48:39 PM PDT by WeatherGuy
The day after Congress passed the new healthcare law, an opponent called it "a fiscal Frankenstein." In fact, those are fitting words for Roth individual retirement accounts, or IRAs. Roths drive up the federal deficit and cause other pain. They're great for holders but grim for America. It's time to retire them.
In a Roth, taxes are treated the other way around. There's no tax break on contributions. But from that point on, taxes simply vanish. As long as the account is at least 5 years old, there is no tax on any withdrawals made after age 59 1/2. There's no requirement that you make a minimum withdrawal after age 70 1/2, or ever.
All of which makes Roths a perfect "fiscal Frankenstein." In return for little more than ordinary upfront taxes, Congress waived untold billions in future Treasury receipts. Then, too, Roths could be a drag on the U.S. economy. Since no withdrawals are required, assets can lie idle indefinitely.
For Roth holders, the accounts become a permanent, federally sanctioned tax shelter. For America, they're a bit like toxic instruments on the nation's books. Worse, Congress has them on steroids, and President Obama wants to up the dosage.
(Excerpt) Read more at latimes.com ...
The $$ contributed to a Roth IRA was already taxed up front before investing. The Federal Govt. should encourage savings since the citizens NEED to save for their own retirements. They’ve taxed us with SS and now they bankrupted that Ponzi scheme long ago. Screw them and keep their greedy, filthy ‘Rat paws off our personal investments where we applied the disciplines and should reap the rewards without the greedy beast in DC stealing even more.
They need a destitute people to rule over. They nationalized pensions in Argentina, they spent it the next day.
I always told people that someday the politicians would try to confiscate the money because they “gave” tax breaks and thus would say it is unfair to have those accounts.
These worthless excuses for Human Beings (the politicians) keep couching taxation topics in the terms of how it “costs” the Government money! HOW DARE THEY! It does not "cost" Government anything. They take it from us.
The money is ours, we earned it, it is our property, and the Government is not supposed to be in the business of stealing, read taxing, everything we have or everything we do and we have let them get away with doing so and also framing the argument.
This crap MUST STOP!
I’ve always had a suspicion that th looters would come for ROTH IRAs.
The best IRA is to get money out of the United States.
what a piece of garbage newspaper article in the LA Times
The money is invested in the economy, so it is doing plenty for the economy. Like job creation.
If things don't change soon, it ain't going to be pretty here in the U.S. of A.
The problems is not that people who struggle to save money do not have enough of their money confiscated. The problem is that the parasites in the government and have an insatiable appetite for other peoples money and see hard working Americans as saps and want to take as much as possible from them.
How dare they, how &U%(#&%*(#&%*( dare they write this collectivist spew. The country has fallen to Communism, just as my parents’ country did, without one shot being fired.
To be seized - well stolen is a more accurate term - by the Federal Government is an unconstitutional act. But, when has that ever bothered a liberal/progressive/socialist/dimocrat acting “in the best interest of the nation”?
We, the People, have stood still for many things including, in all probability, means testing for social security. But out right theft of personal funds without any pretext of criminal activity? That's a line that no politician, no matter how ideologically blind, should ever contemplate. Beyond that line live tigers and dragons.
***** great for holders but grim for America ****
Two kinds of “America”, one for those who believe in private property, the other Communo-Fascists.
What an ignorant article. Roth money isn’t in a mattress, it’s actively invested or in a bank where the money is used for loans.
This author acts like investment money is money lost to the economy.
I really tried to understand the author’s argument, but I just don’t get it. People have already paid taxes on the contributions, right?
Touch mine and shots WILL be fired.
I did very little Roth first because my taxes are pretty high now anyway, and second because I figured that eventually they’d tax them for “high earners”. At least with traditional IRAs, I already GOT my tax break.
Last year I transferred all of my Traditional IRA savings into a Roth. There was a provision, for that year only, that allowed delaying the payment of tax. I put it all in Silver and Gold ETF’s. I know they’ll want to come after the IRA’s, but this is my only way I can protect my savings from what I know what Obama is doing to the dollar.
I am not going on record as saying what I would or would not do, but the results would not be pretty.
Unfortunately tax rates are probably going to be twice as high when we finally withdraw our money from our IRAs and 401ks. And there will be a VAT tax on top of it all.
I think everyone will be scratching their heads wondering why we all decided to pay taxes later instead of years earlier, when the tax rates were lower.
I've never been willing to do a Roth because I figured it was a tax trap - that they'd start taxing withdrawals. I may have missed out on a good thing, but I don't trust the politicians.
More likely what they will do is require a "small" percentage of IRA and 401ks be put into government bonds or other "socially responsible" investments. After all, since the government is letting us have so much it wouldn't be that big of deal that they get to control 10% (or 25% or 50%) of our investments in tax deferred accounts. < /major sarcasm> Seriously, I fear that that they will start finding a way to either nibble away at it with bad investment choices or convince people to bail out and pay the taxes on early withdrawals.
This ultimately is what I think will happen as well.
The tax rates will only be going up, not down, for the foreseeable future. The ‘your tax rate will be lower’ ruse didn’t come with a guarantee.
The writer needs to watch “It’s a Wonderful Life” again.
“Aw com’n Harvey. It’s not like all the money is lieing in the vault there. Your money was used to build Tom’s house, and Tom’s money was used to build Joe’s.” (Or somesuch)
What these blithering idiots don't realize -- or want to admit -- is that assets "lying idle" actually are investments that put people to work.
These blithering idiots are gloaking at our funds.....
There is no argument or debate, period. This idiot wants the government to have your money. It is theft. And the left thinks they are entitled to it.
Only a liberal idiot defines an asset as idle just because government can't get their hands on it.
Yeah, someone has extra money laying around so they must be rich and be forced to share. The government set up retirements accounts, was it just to siphon off the money and confiscate it in the future?
The original intent was to give corporate executives a tax break by using a deferred compensation plan to shelter some income.
“In return for little more than ordinary upfront taxes”
Little more than ordinary taxes?
This whole political/ruling elite bunch can KISS MY A%%!
EXACTLY my thoughts.
My husband agrees with you. He’s always been skeptical of Roth’s and the ability of the gubmint to not turn around and tax them.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.