MONEY: ROTH IRA’s tax-free status may NOT be dependible

Roth IRA Conversion Question
For Immediate Release
April 22, 2010

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Question: Regarding Roth IRA conversions, what is there to prevent the government 10, 20 or 30 years from now taking these Roth IRAs and changing rules and making them taxable, either all or in part, or making them subject to the AMT?

Ric: There is nothing preventing Congress from doing that. That is one of our objections to the Roth IRA and specifically to the Roth IRA Conversion.

Congress says Roth IRA withdrawals are tax-free, but we get a new Congress every two years. Planning to retire in 20 years? That’s 10 Congresses from now.

If the government needs more revenue, a future Congress might decide to tax the money held in Roth accounts. You can even argue that this is why Congress allows Roth conversions in the first place: The conversion does not necessarily lower your taxes, but it does accelerate your payment of them. By getting you to convert, Congress gets the tax revenue now. Clever, huh?

Do you trust Congress to honor its promises? The more you do, the more confident you can be about putting money in the Roth IRA. Personally, I am not terribly confident.

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The out of control congress doesn’t inspire confidence.

As they cast around for “revenue”, the 401ks and IRAs must certainly be attractive.

Watch your wealth it’s hunting season for money in DC!

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INTERESTING: This call may be recorded for quality assurance

Posted on Fri, Apr. 16, 2010
Bankruptcy judge orders taping documents produced
By Christopher K. Hepp Inquirer Staff Writer

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The auction is central to the company’s reorganization plan, which calls for the senior lenders, including Angelo Gordon & Co., CIT Group, and Credit Suisse, to receive the proceeds from the sale to settle about $318 million in debt. The lenders have said they intend to bid on the company.

The taping incident involves a meeting between company officials and some of its senior lenders at Philadelphia Newspapers’ Broad Street headquarters to discuss a possible negotiated settlement of the company’s debt.

Brian P. Tierney, Philadelphia Newspapers’ CEO, discovered Vincent DeVito, a representative of the CIT Group, taping the meeting. In Pennsylvania, taping a meeting without permission is a crime.

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This has come up several times. In the context of Acorn. In the context of police actions. And, now this.

Shouldn’t it ALWAYS be legal to tape something that you are a witness to?

Putting on my Judge Judy hat, seems obvious to me.

Besides aren’t we always hearing: “This call may be recorded for quality assurance”?

I don’t get a choice. So what different.


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