Stimulus

Quote: AZDuffman

What you do not understand is that back then there were lots of deductions. Credit card interest was a deduction. If you want tax increases to "cut the deficit" they will have to be broad bases. The bottom 47% have to start paying. The middle have to pay more. The "rich" who you hate so much simply are too scare.

What I do not get is why you are saying this. You and the left were so upset when Trump raised taxes on the "rich" last time?

Wanting someone else to pay 50% when you do not is the height of greedy and selfish.

As much as they try to tell us "the rich" can pay more taxes and all will be well, they can't prove it. They can't prove it because it won't work. We haven't had a balanced budget in years; it is a two-party problem. Both of them want to spend beyond revenues. I am sure Biden, like others before him (including Obama and Trump) will come up with a plan that both balances the budget and begins to reduce the debt in XX years...the problem with those lies is that all the pain occurs in "out" years...very little of it during the actual term they hope to win.

On this issue, don't believe either of them.

We can't get to a balanced budget without actually spending the same or less than we take in (the document may look balanced, but it also has to play out) and we can't balance the budget or reduce the debt by simply taxing the rich.

Quote: RonC

I am sure Biden, like others before him (including Obama and Trump) will come up with a plan that both balances the budget and begins to reduce the debt in XX years...the problem with those lies is that all the pain occurs in "out" years...very little of it during the actual term they hope to win.

I don't even know if it was a D or an R who pushed for "Roth IRAs", but they are the perfect example of what you are saying. Over the last 23 years the government has been getting solid tax revenue from those putting money in Roth IRAs, but will get none when people start taking money out! But people taking money out of traditional IRAs do pay taxes on them now. So for a while the government was collecting on the withdrawals, because they were from traditional IRAs, AND the deposits, because they were now Roth type. But soon the withdrawals will not be taxed. In 1997, the decision was made to take the money and just figure it will be some other politician who will have to fix it (or ignore it) in the future.
Without thinking too hard, it was probably Clinton, as he had an essentially balanced budget.... because of this ploy.

In case someone doesn't know the difference....

"Traditional" IRA. If you make $100k and put $6k into the IRA, you are only taxed on $94k now, but pay tax on the withdrawals decades later.
"Roth" IRA. If you make $100k and put $6k into the IRA, you are taxed at $100k now, but pay no tax on the withdrawals decades later.

My IRAs are all traditional, so I will have a big tax burden when I start withdrawing in a decade or so.
My son's IRAs are all Roth..... easy retirement!

Quote: SOOPOO

I don't even know if it was a D or an R who pushed for "Roth IRAs", but they are the perfect example of what you are saying. Over the last 23 years the government has been getting solid tax revenue from those putting money in Roth IRAs, but will get none when people start taking money out! But people taking money out of traditional IRAs do pay taxes on them now. So for a while the government was collecting on the withdrawals, because they were from traditional IRAs, AND the deposits, because they were now Roth type. But soon the withdrawals will not be taxed. In 1997, the decision was made to take the money and just figure it will be some other politician who will have to fix it (or ignore it) in the future.
Without thinking too hard, it was probably Clinton, as he had an essentially balanced budget.... because of this ploy.

In case someone doesn't know the difference....

"Traditional" IRA. If you make $100k and put $6k into the IRA, you are only taxed on $94k now, but pay tax on the withdrawals decades later.
"Roth" IRA. If you make $100k and put $6k into the IRA, you are taxed at $100k now, but pay no tax on the withdrawals decades later.

My IRAs are all traditional, so I will have a big tax burden when I start withdrawing in a decade or so.
My son's IRAs are all Roth..... easy retirement!

I never converted mine. Be careful on Roths. One day the feds may seize part of them or some other way to get at that money. Has happened in other countries already.

Quote: SOOPOO

"Traditional" IRA. If you make $100k and put $6k into the IRA, you are only taxed on $94k now, but pay tax on the withdrawals decades later.
"Roth" IRA. If you make $100k and put $6k into the IRA, you are taxed at $100k now, but pay no tax on the withdrawals decades later.

My IRAs are all traditional, so I will have a big tax burden when I start withdrawing in a decade or so.
My son's IRAs are all Roth..... easy retirement!

Depending on your son's current situation he might think about diversifying a bit. I have lots of savings in both vehicles, but more in traditional.

Assume the min level of taxation when you retire is $30,000 (standard deduction or itemized or whatever - just pick a number here). You plan to live on $60,000 a year. Would you rather:

A) Pull $25k from your traditional IRA/401k and $35k from your Roth: tax liability = $0
B) Pull $60k from your traditional IRA/401k: tax liability = whatever % x $30k

Balance is good. And depending on your retirement plans, and your thriftiness, think about what you will need to live on in retirement vs. your current income. Personally I make way more money now than I need to live on, or will need to withdraw in retirement. So in my situation traditional IRA/401(k) contributions actually make more sense, since I'm reducing my current tax burden at a HIGH income level, and when I retire I will only be withdrawing enough to live on, thus a much lower income level.

That being said I still max out my Roth IRA every year that I can (was over the income limit when my wife was still working). But it's only $6k vs. $19.5k into my 401(k). My workplace offers a Roth 401(k) as many do now, but as per the above, I make traditional contributions.

Quote: AZDuffman

I never converted mine. Be careful on Roths. One day the feds may seize part of them or some other way to get at that money. Has happened in other countries already.

Please provide a source for this comment.

Back on topic, finally got our McConnell-PelosiBux(TM) today.

Quote: AcesAndEights

Quote: AZDuffman

I never converted mine. Be careful on Roths. One day the feds may seize part of them or some other way to get at that money. Has happened in other countries already.

Please provide a source for this comment.

European nations begin seizing private pensions

There was also talk of buying out IRAs in the USA with Treasuries post-2008 meltdown.

Quote: AZDuffman

Quote: AcesAndEights

Quote: AZDuffman

I never converted mine. Be careful on Roths. One day the feds may seize part of them or some other way to get at that money. Has happened in other countries already.

Please provide a source for this comment.

European nations begin seizing private pensions

There was also talk of buying out IRAs in the USA with Treasuries post-2008 meltdown.

Thanks, not exactly the same situation as not many jurisdictions have an equivalent to the Roth IRA, but point taken.

I have expressed this worry in the past, and it's one of the reasons I balance between Roth and traditional. Traditional will get hit if tax rates go up, which I consider much more likely than any haircut taken off of a Roth.

Aces.... my son that is doing the Roth is making barely above minimum wage now, so he pays virtually no federal income taxes. So Roth is a no-brainer for him. He can afford the Roth because he has a decent nest egg from mom and dad that is in a taxable account. So really just moving money from taxable to non-taxable.

AZ.... If the government starts seizing retirement accounts then me having a retirement account or not is the least of my worries. I ABSOLUTELY can see the government reneging on its promise to keep the Roth's tax free... "For high net worth individuals, we will tax Roth' withdrawals but only at 10%..." It is one reason I never converted....

Quote: SOOPOO

Aces.... my son that is doing the Roth is making barely above minimum wage now, so he pays virtually no federal income taxes. So Roth is a no-brainer for him. He can afford the Roth because he has a decent nest egg from mom and dad that is in a taxable account. So really just moving money from taxable to non-taxable.

Yep good call then.