How Obama wants to prevent future Mitt Romneys from sheltering massive amounts of wealth [View all]

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Talking Points Memo ‏@TPM 14m

How Obama wants to prevent future Mitt Romneys from sheltering massive amounts of wealth from taxation http://bit.ly/12NF3bG

____ President Obama’s 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 wouldn’t 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