121–130 of 306 posts
This is not the tax loophole that needs closing. Policymakers are still refusing to tax the ultra high net worth elites.
But it does (attempt to) say "you cannot avoid paying tax on gigantic capital gains by shielding it inside a Roth IRA". It is absolutely directed at ultra high net worth elites.
There is an argument that simply capping the gains inside a Roth IRA that can be tax-exempt would be a more efficient way to do this.
Earlier quoted context omitted.
The whole deal is a 'we are spending tons of cash, so we need to take it from someone' plan. This isn't a "watching out for the average person" deal.
Or maybe it's trying to close loopholes around having to pay taxes. >The whole deal is a 'we are spending tons of cash, so we need to take it from someone' plan Funny how spending tons of cash is a problem only if it benefits poor and middle class people. I never saw this outrage on trillions spent on endless wars, since that benefits rich people. But if something helps poor or middle class and hurts rich people a li…
I'd recommend reading the proposed provisions themselves directly from the Ways & Means Committee instead of the main article urging action: https://www.advantaira.com/wp-content/uploads/2021/09/WM-Tax... Highlights: 1. You can't add new contributions to tax-advantaged accounts if their total value exceeds $10 million and you make over $400K for single filers, amounts indexed to inflation. 2. There are required minim…
Just a nit-pick of your analysis. The proposed legislation closes both the megabackdoor Roth (employee after-tax contributions) and backdoor Roth (prohibition on IRA contributions from being converted) regardless of income level:
"Furthermore, this section prohibits all employee after-tax contributions in qualified plans and prohibits after-tax IRA contributions from being converted to Roth regardless of income level"
...which, depending on what you consider a tax increase, appears to run contrary to President Biden's promise to not increase taxes for anyone making less than $400K. This gutting of IRA conversions seems like the only piece of the pie that hurts the middle class, although arguably the upper end of the middle class who have the means to set aside more than the $19K 401(k) max per year.
I'd recommend reading the proposed provisions themselves directly from the Ways & Means Committee instead of the main article urging action: https://www.advantaira.com/wp-content/uploads/2021/09/WM-Tax... Highlights: 1. You can't add new contributions to tax-advantaged accounts if their total value exceeds $10 million and you make over $400K for single filers, amounts indexed to inflation. 2. There are required minim…
Probably not a ton of people. But there might well be a ton of money in these accounts.
https://www.theatlantic.com/politics/archive/2012/09/whats-r...
So, progressively since probably the 1980s (maybe earlier?) Australia has introduced a system called "superannuation" (or just "super" for short). There are two parts to this: 1. Mandatory contributions: currently 10% of your income; and 2. Voluntary contributions: you can contribute more and get a lower tax rate for doing so. By comparison, 401k contributions are tax free. Voluntary super contributions are not. This…
The income has already been taxed. The economics are identical to other qualified retirement plans. This is simply more about restricting freedoms and making excuses for targeting Peter Thiel personally.
What Thiel did was (and is) not illegal, but it is viewed as an abuse of the intent of a Roth IRA that (some in) Congress want to restrict in the future.
Just so people are aware, high income individuals can’t use IRAs. This is a direct action against middle to low income individuals. https://www.irs.gov/newsroom/new-income-ranges-for-ira-eligi...
The whole article is predicated on the lie that low and middle income earners are buying private placements and LLCs in their IRAs. They are not. Full stop.
That's a massive flex on your part, I know a co-worker who did this and he earns less than 185k a year.
> Under these provisions, you would no longer be allowed to invest your IRA into private placements and single-member LLCs, regardless of your level of income or wealth. > This will result in significant tax consequences for many people, including low and middle-income investors. BS! In order to legally invest in private placements, you must be a "accredited investor" which means you earn over $200k individually or $…
That's certainly middle class lifestyle in many states in the US if you have a family with kids and have never had a windfall from parents, inheritance, startup luck, etc. Trying to figure out retirement on top of that is a challenge.