For more than ten years we’ve heard about how fiscally conservative Bill Clinton balanced the budget and how fiscally irresponsible Republicans screwed that all up with their wasteful spending on tax cuts and two unnecessary wars. I’ve been saying for years that the only reason Bill Clinton had year-over-year surpluses the last few years of his presidency is because he slashed the military and the Pentagon spending and because of Roth IRA conversions. The LA Times finally came around to the Roth IRAs idea earlier this week. <\/p>\n
In 1997, Clinton and Congress created the Roth IRA – after tax money growing tax free. They also allowed for pre-tax money in IRAs and 401ks to be converted into Roth IRAs, after you paid the taxes due on your pre-tax money. Billions of dollars that wouldn’t have been taxed for more than a decade was suddenly taxed. So billions in unexpected revenue flowed into the Clinton Treasury.<\/p>\n
And now, liberals see how this is working to their disadvantage – with $billions of untaxed growth sitting in private Roth IRAs, they don’t have any new schemes to get their grubby little paws on it. So the LA Times<\/a> recommends that the government scrap the Roth and break yet another promise to tax payers and retirees.<\/p>\n Gleckman is the editor of TaxVox, a blog published by the nonpartisan Tax Policy Center in Washington. Here’s Gleckman on Roths for the rich: “In the long run, turning billions of dollars from tax-deferred to tax-free savings will be a huge loser for Treasury. My colleagues at Tax Policy Center figure that, through mid-century, allowing unlimited Roth conversions will reduce federal revenues by $100 billion.”<\/p>\n Whatever the answer for individuals, there’s little doubt that Roths are wrong for America. They’re Frankensteins, fated to wreak havoc. It’s time to retire Roth IRAs.<\/p><\/blockquote>\n The Times reaches the conclusion that anything that’s good for the taxpayers is bad for the government – which is usually true. That’s why the Bill of Rights protects us from the government. The untaxed growth in my Roth IRA helped pay for my house (under certain conditions, you can withdraw limited amounts of the growth and principal from a Roth before age 60 – I called the IRS first, so should you) so the government didn’t get a share of my money, but it went into the economy just the same. Where do you think it did the most good?<\/p>\n","protected":false},"excerpt":{"rendered":"