I suspect this administration is gonna try and raise taxes every chance they get in order to try and pay for this nonsense stimulus . I cant help but wonder how long it is before they try to change the rules on Roth investments. I read an article that was critical of Roth backdoor rollovers by 'wealthy people'...their term, not mine. My Edward Jones advisor speculated over 20 years ago that he did not think it would last long since it was a great investment tool for the common person and did not benefit the government. Well, obviously he was wrong and it has lasted quite awhile, but its not gonna surprise me to see them try and 'tweak' it to their benefit. Whatcha think..?
I dont disagree , 208k is great income, but i worry that once that loophole is eliminated, they will then try to tweak or eliminate the Roth for the rest of us. They need every tax dollar they can get...they dont make money on a Roth.
There are other ways to get your money than directly taxing your Roth earnings. For example, increasing the cost of Medicare for those over a certain retirement income or total wealth level. Another option is to decrease your SS payment if your have over a certain retirement income. The 2nd strategy already exists but the threshold is quite high. It could be lowered. The government has a plethora of options for taking money from those that earned it and giving it to those that didn't. The truly wealthy have lawyers and accountants helping them find the loopholes. Those in the middle get stuck with the bill.
As stated there are a multitude of ways that we can be taxed or charged a fee to garner more revenue for the government and or lower deficits etc. We need to talk about deficits first as it will be a long time before we start working on lowering our national debt if we politically and socially want to even try. My wife and I are re-characterizing or deferred accounts into ROTHS during this lower tax period. For us that do not earn enough in retirement to pay into ROTHS if we get grand fathered in that will be good. It is still quite amazing to me with the market having done very well the last 30 plus years more tax payers have not chosen to participate in investing for their future.
I put my first $'s in the market in 1975 and as of this year we have the 9th executive administration, about 23 different Congresses, many changes in the Supreme Court and way too many state and local changes to count so I don't by into all this the sky if falling and everyone is out to steal my money. A huge and healthy market helps fuel a strong and growing economy and be it capitalistic or more socialistic the fact that companies have good places to find capital or gain leverage for loans to grow is important. The two largest dairy marketing firms in the world or French companies, and those companies are growing and successful. Sure many countries have a more socialistic culture then we do but it does not mean that the government wants or intends to take over unless, unless many businesses would invite them to do so. Several nations have joint private and public ownership of many major firms, most dealing with energy. Here in the USA we choose to subsidize or partner with business through our tax laws and codes.
The sky may not be falling but the tax code is about to get a makeover shortly after 2022. The table is set and menus passed around to see what will be needed in 2022 to secure it. I’m certain the “we gotta be liked by all” government will take into consideration Global company partnerships when deciding what is best.
I don't see anything major happening to the tax code after 2022. The conservatives like the tax code as it is and are very likely to hold either the House, Senate, or both after 2022. If there is going to be a change it will happen in the next 13 months.
If I were young I would be saving as much as I could as down the road it is much more likely that individual retirement programs such as ROTH or traditional will be the major later in life funds as to me the government is more likely to play with SSI stipends, age limits etc. then personal accounts. Even if taxed down the road they are going to be a better revenue source. If we continue to have Medicare as similar to what we have now it could be that a greater percentage of the SSI tax be going to that fund and less to the SSI stipend and individuals need to save more. The responsibility to save for retirement is even more important today with far fewer pensions and profit sharing funds by employers. I don't see this trend changing either. A lot of post on here have stated how the government will take over with socialized insurance. I worked in the public sector for 40 years including the military and I saw many take jobs in the public sector so they could get the HC insurance benefits, even if they could earn more at other places and this allowed many small business owners to operate w/o the cost of buying insurance, so our capitalistic system has been milking public supported HC for decades already, so continuing that process is not surprising to me and very likely to increase.