Just met with my accountant for the 2011 taxes. He is also a close friend. Discussed my retirement plans that include only taking the dividends from my self directed IRA at age 70 1/2. Have had a self directed IRA since the first year they were offered---1975. Accountant said that Obama and the some Democrats would leap at the opportunity to confiscate and redistribute the IRA, 401K and all private pensions if they could. I have been investing in the IRA for 35 years and by the signature of the President it could be gone. I have planned for a COMFORTABLE RETIREMENT. My accountant reminded me that during the Clinton years much consideration was given to a one time 15% tax on the value of all IRA, 40lk,similar plans and private pensions. Also, Clinton wanted private pension plans to invest 5-10% of its portfolio in social and government programs. I would suggest all people near retirement with savings in a retirement plant be ready to make a one time withdraw of funds and bear the tax burden before all of it is gone. Oh, the accountant said that plans include giving those who have had their nest egg confiscated would get an extra $200 or $300 in their Social Security. Scary!
It should be easy after the rich are taxed, to change the definition of rich from income to assets. Anyone with a net worth of over half a million isn't paying their fair share!
People have been speculating about things like this forever. Nothing dramatic has really happened. Obama could never do something like this alone, he would need Congress's support. Signing such a bill into affect would be political suicide and would almost certainly fail in Congress. The elderly are a very powerful demographic in the country and they would never stand for it. Also, redistributing all the IRAs would be pretty much impossible. IRAs are just tax deferred/tax deductible vehicles for retirement savings. You can invest them in literally anything. In order to redistribute them Congress would have to seize bonds, commodities, real estate, stocks, and various other kinds of investments. Taking billions of dollars ad nauseum from the economy would be absolutely devastating. The transaction costs would also be considerable. The only real danger is that the special tax deferred status gets taken away. If this happens you would just end up paying taxes on the IRA like any other dividend or capital gain. Chances are though they would somehow grandfather you in. The benefits of investing through an IRA FAR outweigh the tiny remote chance that Congress passes something radical that makes it not worthwhile.
Not to worry, Obama never checks to see if what he advocates is Constitutional. It's as if the Constitution does not even exist.
TO: Not Amused. I've got news for you. A net worth of $1.5 million is not as rich as you think. You should read "The Millionaire Next Door." In order for someone to be as independently wealthy as a millionaire in the 1950s was, they have to have a net worth of about $8 million. Think about it: 1. If you have a million dollars and generate 3% interest - - - you have a mere $30,000 in income. 2. If you have $8 million and have the same 3% -- you have $240,000 income. I think Obama will shift from income worth to asset worth in his 2nd term. Sadly, he will probably win.
Personally, I'm not sure that the reason they find ways to take our money is because they want our money. After all, if they take in twice what they used to they spend 4 times as much. I think the crux of what they are after is simply destroying our power that such money provides the common man. That way they can herd us all around like cattle much easier. I think this the man reason that they inflate the dollar. Who can fight that?
We realize that, but when the average income is $50K a year, meaning a lot of people (voters) make less, a 1/2 million (not $1.5M) in assets sounds rich. Just like an income of $250K sounds like a lot, even if you are a business. Odd, that those same voters don't understand the government needs $33K for every tax payer, to operate. But, hey - taxing the rich will fix the budget right up.
JUST READ YOUR ORIGINAL POST and you said anyone with a net worth of half a million isn't paying their share. If you believe that there is so very much that you don't understand. Half a million dollar net worth does not qualify some as being rich. In the normal course of life by living prudently and saving consistently (investing consistently) one could get to the age of 60 and easily have accumulated half a million dollars. And, you want to take part of that away from them? Again, I repeat half a million dollars is not rich.
I understand that, and I fully agree with you! I was referring to the progressive Democrats. Anyone that has done any preparation for retirement will have $500K (and still be woefully unprepared). BUT, politicians don't care about reality, they care about getting re-elected. They have spun an income of $250K as rich, because it makes a great sound bite. What do the polls say about the success of that strategy? The problem is there is a huge difference in disgressionary income between a trust fund kid with a $250K income from investments, and a sole propieter that made $250K and invested $200K in capital equipment with a 20 year depreciation. But, that is too confusing for the public, so it is ignored in the sound bite. People are anxious, they are tired of the resession, they want to someone to fix this. Just like a drowning swimmer will climb on their rescuer, drowning them both, much of the public will support anything that looks like a solution. The politicians, being our "leaders" (what ever happend to public servant), are taking the opportunities to push their agenda as salvation, and the the opposition as the cause. (remember "Don't let a good crisis go to waste").
