Billionaires and Roth IRAs: the case for tax reform

#27
#27
NorthDallas40 said:
Why? The whole premise is the growth is tax free. It’s silly to say “it grows tax free unless you’re really/good at investing it then we want that money back.” Hell no.
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The purpose wasn't to allow for the stashing of billions. Hell, yeah. Charge the wealthy. No reason someone making billions should pay an effective tax rate of that below the average american.

I am all for a flat tax rate regardless of type of income.
 
#28
#28
lawgator1 said:
https://www.propublica.org/article/...s-into-a-5-billion-dollar-tax-free-piggy-bank


This should make every American very angry. This is exactly what's wrong with our tax system. I am of the opinion it should no longer be run by Congress. As long as they themselves get insider deals, and as long as they are dependent on the generosity of those that do, the Congress cannot be trusted with the power to make the rules on taxation.

I'm open to alternatives. A constitutional amendment to tax all income, regardless of source, at a flat 10 %? No exemptions, deductions, no tricks or dodges. Or how about a pro rata share of the country's bills every year, plus a 30 year plan to pay off the debt, based on income? Would force Congress to be careful in its spending because taxes rise or fall every year based on what they outlay.

Bottom line is that the tax system is currently manipulated by those with enormous wealth so as to concentrate wealth even further and it needs to end.
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My suggestion on any “tax free” investment like a roth is there should be a max cap on the amount that remains tax free and all dollars that exceed the cap should immediately be treated like an RMD on traditional IRA’s. For example, if the cap were set at $1millon, on January 1of each year the institutions holding the ROTH accounts should send all amounts over $1million to the account owners. I don’t know what a fair cap rate would be but $1million should be plenty if it’s truly intended as a retirement vehicle for the working class and not a tax dodge for the wealthy. Probably ought to consider a cap on traditional IRA’s also. JMO, TIFWIW, AARP
 
#29
#29
lawgator1 said:
I don't think you read the article about how they are using Roth IRAs as a house within which to make insider deals amongst themselves and shield the profits. Its a cute game.

Rich A starts a company and sells Rich B stock worth $25 a share at initial offering of $.00001 a share. Rich B does so within the IRA. Company goes public and he makes tens if not hundreds of millions of dollars, completely tax free.

Rich B starts a company and Rich A buys shares. Same deal. He makes millions upon millions, tax free.

Some in Congress have proposed caps on the tax exempt status, to prevent this circle of fraud. But guess who keeps getting it squished.
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Lawyers wrote the regulations. It's on you bubba.
 
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#31
#31
walkenvol said:
My suggestion on any “tax free” investment like a roth is there should be a max cap on the amount that remains tax free and all dollars that exceed the cap should immediately be treated like an RMD on traditional IRA’s. For example, if the cap were set at $1millon, on January 1of each year the institutions holding the ROTH accounts should send all amounts over $1million to the account owners. I don’t know what a fair cap rate would be but $1million should be plenty if it’s truly intended as a retirement vehicle for the working class and not a tax dodge for the wealthy. Probably ought to consider a cap on traditional IRA’s also. JMO, TIFWIW, AARP
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$1MM isn't that much for those that are competent investors and put in the maximum each year from 20-65.
 
#32
#32
ClearwaterVol said:
The purpose wasn't to allow for the stashing of billions. Hell, yeah. Charge the wealthy. No reason someone making billions should pay an effective tax rate of that below the average american.

I am all for a flat tax rate regardless of type of income.
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Fine let’s do it. Fairtax.org then. But… all monies accrued thus far were accrued legally by the rules in place and should be exempt. So all those billions are still protected. And penalizing the 99.99999% of people trying to save for their retirement to get that 0.00001% probably isn’t a winning strategy.
 
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#34
#34
walkenvol said:
My suggestion on any “tax free” investment like a roth is there should be a max cap on the amount that remains tax free and all dollars that exceed the cap should immediately be treated like an RMD on traditional IRA’s. For example, if the cap were set at $1millon, on January 1of each year the institutions holding the ROTH accounts should send all amounts over $1million to the account owners. I don’t know what a fair cap rate would be but $1million should be plenty if it’s truly intended as a retirement vehicle for the working class and not a tax dodge for the wealthy. Probably ought to consider a cap on traditional IRA’s also. JMO, TIFWIW, AARP
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I like that you put "tax free" in quotes because it's certainly not if you start means testing it.

This could end up being the first salvo in the "these people have saved too much for retirement, let's get it back" crowd.
 
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#35
#35
DancingOutlaw said:
I like that you put "tax free" in quotes because it's certainly not if you start means testing it.

This could end up being the first salvo in the "these people have saved too much for retirement, let's get it back" crowd.
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That is absolutely where it’s headed.
 
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#37
#37
walkenvol said:
My suggestion on any “tax free” investment like a roth is there should be a max cap on the amount that remains tax free and all dollars that exceed the cap should immediately be treated like an RMD on traditional IRA’s. For example, if the cap were set at $1millon, on January 1of each year the institutions holding the ROTH accounts should send all amounts over $1million to the account owners. I don’t know what a fair cap rate would be but $1million should be plenty if it’s truly intended as a retirement vehicle for the working class and not a tax dodge for the wealthy. Probably ought to consider a cap on traditional IRA’s also. JMO, TIFWIW, AARP
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Investors can own an unlimited number of Roth accounts. Reporting just those over $1,000,000 won’t work.
 
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#38
#38
ClearwaterVol said:
So, pay taxes on it.
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Why? Change the law if you don't like it. The only problem with that is since congress has only a 256K RAM brain, they will go scorched earth and **** everybody it was intended to help in order to **** a few that took advantage of it.
 
#40
#40
lawgator1 said:
I don't think you read the article about how they are using Roth IRAs as a house within which to make insider deals amongst themselves and shield the profits. Its a cute game.

Rich A starts a company and sells Rich B stock worth $25 a share at initial offering of $.00001 a share. Rich B does so within the IRA. Company goes public and he makes tens if not hundreds of millions of dollars, completely tax free.

Rich B starts a company and Rich A buys shares. Same deal. He makes millions upon millions, tax free.

Some in Congress have proposed caps on the tax exempt status, to prevent this circle of fraud. But guess who keeps getting it squished.
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That sounds more like fraud or some other illegal activity.

Self directed ROTH IRAs are available to everybody on this board. Guess what you can do with a self directed ROTH IRA? Buy real estate. ALl monies go into that tax free.... rent for example. My ROTH would be a Trump esque real estate mogul right now except that my wife doesn't want to mess with real estate. I think we are making a huge mistake, but happy wife happy life....

dyodd, not intended as investment advice, bama sucks, etc etc etc...
 
#41
#41
SpaceCoastVol said:
Why? Change the law if you don't like it. The only problem with that is since congress has only a 256K RAM brain, they will go scorched earth and **** everybody it was intended to help in order to **** a few that took advantage of it.
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They won't screw themselves or their own family.
 
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#42
#42
ClearwaterVol said:
The purpose wasn't to allow for the stashing of billions. Hell, yeah. Charge the wealthy. No reason someone making billions should pay an effective tax rate of that below the average american.

I am all for a flat tax rate regardless of type of income.
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define 'wealthy'.
 
#43
#43
Thunder Good-Oil said:
Roth owners also receive zero tax benefits with their capital losses. There is no relief when an investment inside of a Roth arrangement goes in the tank. The government should never touch the Roth capital gains.
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Lose money: oh well that's life make better decisions next time
Make money: that's a little unfair you made that, I'm going to need a piece
 
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#44
#44
walkenvol said:
My suggestion on any “tax free” investment like a roth is there should be a max cap on the amount that remains tax free and all dollars that exceed the cap should immediately be treated like an RMD on traditional IRA’s. For example, if the cap were set at $1millon, on January 1of each year the institutions holding the ROTH accounts should send all amounts over $1million to the account owners. I don’t know what a fair cap rate would be but $1million should be plenty if it’s truly intended as a retirement vehicle for the working class and not a tax dodge for the wealthy. Probably ought to consider a cap on traditional IRA’s also. JMO, TIFWIW, AARP
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Oh Hell naw. This sounds exactly like the AMT. No. Putting a hard number eventually gets more and more people as inflation happens. Just no. Yours is a horrible idea.
 
#46
#46
DancingOutlaw said:
I like that you put "tax free" in quotes because it's certainly not if you start means testing it.

This could end up being the first salvo in the "these people have saved too much for retirement, let's get it back" crowd.
Click to expand...
It all starts that way.

They just never realize that this time isnt different and they only end up hurting the common person.
 
#47
#47
A 21 year old who puts $500 a month into a Roth IRA and averages a 10% annual return will have $4.3 million when they turn 66.

Is that too wealthy?
 
#50
#50
The government needs to stop worrying about devising ways to prevent and take away wealth and instead figure out how to get the spending side under control. The extremely wealthy will just give up their US citizenship if the tax burden becomes too oppressive. Government should figure out how to incentivize wealth creation. The wealthy are consumers. They create jobs. Even if they aren’t spending their wealth, their investments are put to work and translate to productivity. Transferring wealth to the government typically leads to waste and less creativity. Less productivity. Less innovation. .

Tax policy should have never become primarily a means to influence behavior (and most recently to buy votes). It should be a way to collectively fund a national defense and to provide a safety net for the destitute. It should never have become a redistribution of wealth scheme that rewards those that chose to not participate in the capitalist society.

The radical Left is an absolute scourge. The Dems and Liberals really need to move their party and ideology back to sanity.
 
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