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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsHow Obama wants to prevent future Mitt Romneys from sheltering massive amounts of wealth
Talking Points Memo ?@TPM 14mHow Obama wants to prevent future Mitt Romneys from sheltering massive amounts of wealth from taxation http://bit.ly/12NF3bG
____ President Obamas budget calls for preventing wealthy people such as, cough, Mitt Romney from deferring taxation on vast sums of money by circumventing laws that limit the amount of money people are allowed to contribute to individual retirement accounts.
Per the budget, Individual Retirement Accounts and other tax-preferred savings vehicles are intended to help middle class families save for retirement. But under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.
But how would they close this loophole?
One way experts believe financial managers avoid the current annual contribution limit to IRAs is by using IRAs to participate in investments and assigning those investment interests a nominal value vastly below fair market.
Obama wouldnt curb this practice directly. Instead his budget calls for an overall cap of about $3 million on the net balance across all of an individuals tax-preferred accounts. Only have one IRA? It can hold $3 million. Have three? Their holdings must sum to $3 million or less.
read more: http://tpmdc.talkingpointsmemo.com/2013/04/how-obama-wants-to-prevent-future-mitt-romneys-from-sheltering-massive-amounts-of-wealth-from-taxati.php
MadHound
(34,179 posts)But frankly I can already see a number of ways that the rich will get around this. Yes, it is the closing of a loophole, but instead of bringing in extra revenue, it will simply cost the rich a bit extra in accountant fees, that's it. And it certainly isn't worth the cost of what is in the rest of budget, namely the Chained CPI.
Larry Ogg
(1,474 posts)And like magic (aka political science), six more will take its place.
Don't take your eye's off the invisible hand, or you might miss the Good Ol' Switcheroo .
But you are right, the accountants will find other ways so rich people won't have to pay.
reformist2
(9,841 posts)Taxing income only is ridiculous.
customerserviceguy
(25,183 posts)But I remember when unemployment comp started to be taxed in 1978. The adjusted gross income cutoff for a married couple to have UC taxed was a then seemingly large amount of $25,000, and for a single person, it was $20,000. Then a few years later TEFRA bounced those numbers down to $18K and $12K, respectively, and of course, the thresholds were later eliminated entirely. Once we've established the principle that a tax-deferred retirement account is not really fully that, then we've started down the slippery slope.
That money is always taxed eventually, when any unused portion goes to heirs, and not just for estate tax. Three million sounds like a lot, but changes in the law and inflation will eventually eat away at it. I would imagine that if we do nothing about Social Security in the next few years, at some point the way out will be to have a person choose either a tax-deferred account or SS, that it's some kind of a double-dip to have both. And there will be lines of people waiting to turn in their IRAs and 401K's for a Social Security check. I hope I'm dead before that happens.
bowens43
(16,064 posts)more obamapoligist bullshit. who cares? he has already tossed the poor, the middle class and the elderly under the proverbial bus.
This presidency has been a disaster and Obama seems to be doing all he can to make it worse
bigtree
(85,915 posts)No one, including Obama, believes these proposals will see the light of day. I'll agree that he's got a foolish political strategy, but I don't see where he had any reason to believe his combination of cuts and tax loophole reductions would EVER be accepted by this Congress.
You can make a pretty righteous argument that the cpi nonsense is just one jackass, kick in the shin proposal - but, there's NOTHING to make me believe that this proposal will do anything more than provide fodder for over-the-top political swipes like yours. Hope that tact actually works to kill this cpi nonsense once and for all. I personally think it just feeds existing cynicism or just warps into the rest of the personal attacks which serve, for some, as debate and argument.
So far, during this President's term, SS and Medicare have been strengthened and enhanced a couple of times. It's been pointed out in several posts here, so I'm not trying to start a long series of links and posts. I'll just say that, you can't show me ONE instance where the president has 'tossed' the 'poor, the middle class and the elderly' under ANYWHERE, outside of this foolish, but doa, budget document.
So, I'm not buying it, bowens . . . not in this thread or the last one you posted your diatribes in.
woo me with science
(32,139 posts)along with plenty more education deform for added misery and corporate sops.
zeemike
(18,998 posts)But face it, the rich hire people to circumvent any law that could be passed by congress...things are designed that way.
Meanwhile he will get the money from SS and Medicare and taxing poor people more...and start the movement of these programs to private concerns....and give another kick to Wall Street.
Something is wrong with this picture...unless of course you are on the receiving end of all that money flowing up to the top...then it may be wrong but it sure is heaven.
bigtree
(85,915 posts). . . and I don't think he had any reason to expect that he would.
zeemike
(18,998 posts)Sp how many Dem's would they need to buy or blackmail or threaten?
Or how about compromising and instead of chained CPI create individual retirement accounts...from some of the SS tax we pay (just a little at first but it can be changed upward once established and no one will notice)...nice little present to Wall Street.
It is the same as that old saying...Would you fuck me for ten bucks?
Hell no....how about a million...well maybe...well now that we have established that you are a whore we are just negotiating on price.
Once they have established that SS is a problem then we are just negotiating how much to cut.
bigtree
(85,915 posts). . . and then you still need republicans to agree to cut their own benefactors' throats.
I still maintain this is little more than a political document; a confounded one at that. I've said it before . . . this is some rookie shit from the WH. But, I don't see a chance in hell that this Congress will ever see 'chained cpi' come before them for a vote.
Obama's not the first Democrat to propose cutting SS. It's just frustrating to see him waste his time trying to appeal to such a wrong-headed argument about the deficit that includes SS. I can accept that he's sincere about the politics; just sincerely wrong.
zeemike
(18,998 posts)And there at least 15 democrats who are with them.
Besides, do they need 60 votes for everything?...or can Harry Reid put it up for a strait vote?
And would he?...my guess is yes he would if told to by Wall Street.
bigtree
(85,915 posts). . . which says ALL money matters MUST originate in the House; except by unanimous consent (60 votes).
zeemike
(18,998 posts)Like Bonner would not bring it to a vote?...or come up with a "compromise" bill that the senate would pass?
Sorry I have lost my faith...but I just can't continue to believe when we have been fooled so many times in so many ways and are triangulated into doing what Wall Street wants.
bigtree
(85,915 posts). . . and I challenge you to find anyone reputable who says they will.
But, I'm worn out with the compromisin' with republicans. I could do with a good brawl.
zeemike
(18,998 posts)And a brawl would be nice....if the Wall Street crowd don't put on the brass knuckles.
But I hope you are right...but I don't count on it...but even so Obama has put it out there and that is the same thing as admitting that SS IS the problem...and that is the first step.
Baitball Blogger
(46,570 posts)take a yacht ride with their clients until they're three miles from the continental U.S.A. and they can sign anything they want.
midnight
(26,624 posts)caseymoz
(5,763 posts)What's with this resolution to stop procrastinating in the future?
I'm not advocating militarism here, but I'll point out we invaded Grenada and Panama for doing far less to our economy, to the world economy, than what the Cayman Islands are doing.
I'm impressed by the inaction here.
ProSense
(116,464 posts)some excellent proposals in the President's budget.
A Budget Focus on Inequality
http://www.democraticunderground.com/10022650258
bigtree
(85,915 posts). . . mainly because republicans don't give a wit about any of the incentives or concessions the President included.
Like you say, ProSense, there are many good elements to this budget. there are also many politically unrealistic things in there, so, we have to consider it, I think, as more of a political statement. As your title suggests, they want to put the focus on republican insistence on protecting their wealthy tax loopholes and their willingness in their budgets to have middle and working class taxpayers pick up the tab.
Also, by spelling out a 'cut' in 'entitlements, the President hopes he has put the spotlight on the republican stage where he expects they will finally be forced to spell out their own idea of cuts and make clear what they will defend and protect; mainly their own taxpayer-derived wealth.
Problem is, republicans have shown zero sincerity in this debate. They responded once to a firm stance by the WH during the last fiscal showdown. No weakness or daylight to support and their posturing lost oxygen. The President's proposal gave them some oxygen. Maybe not enough to overcome their own vacuous concern for SS and Medicare - outside of the type of reflexive bashing like the RNC did today over the President's SS proposal -but enough to sustain their delusions until, perhaps, the next election.
That's what I think this budget document represents, and I think the challenge to own the definition of it will consume the pending campaigns over the next several months. I think the WH has a long and hard slog to turn this into a debate over 'inequality;' much like the hard slog during the last election.