Monday, December 28, 2009
The 10 Worst Tax Ideas of 2009
Howard Gleckman (Urban Institue) has a great post on The Ten Worst Tax Ideas of 2009. My favorites:
10. The Roth Rollover. Let’s see, allowing people to turn their tax-deferred retirement savings into fully tax-free investments starting on Jan. 1 will be a long-term fiscal catastrophe. And in the short run, the up-front taxes people must pay to roll into a Roth could depress the stock market and damage the shaky recovery. What’s not to like? ...
6. The Estate Tax. Now you see it. Now you don’t. Wait, there it is again. So what if nobody has any idea how to do estate planning anymore. On the other hand, Congress has had only eight years to fix this mess. ...
3. The homebuyer credit. Congress started the year by giving away $8,000 in subsidies to "first-time" homebuyers, as many as 74,000 of whom, it turned out, never quite got around to buying a house. Then, it extended the boondoggle to current owners who buy up. Bottom line: People who were already going to buy will get billions of dollars in government subsides. But you gotta make those real estate agents happy.
2. The Obama Tax Reform Panel. Not only will it fail to propose an improved tax code, it missed its own deadline. Nothing beats being both disappointing and late. “After the holidays,” the Obama people say. Does anybody care?
This would all go so much better if all parties would observe one principle: By what authority do we use, for example, the words "allowing people to" in conjunction with a cabal of elites in a faraway place on the one hand and your and my personal property on the other.
If conservatism stands a hope of reestablishing itself, maybe it should start by not competing with liberals in the area of (miss)calculating - projecting, really - every damn net effect known to the universe. Checking briefly with our own history, this we can call "a long-term fiscal catastrophe".
Just ask yourself "by what authority" instead of "to what end". See? Simple. And just.
Posted by: Ten | Dec 28, 2009 12:23:00 PM
Don't understand why the Roth Rollover is such a bad idea. People who have EARNED money, will end up paying LESS in taxes.
How is that a bad thing, unless you are of the mindset that the government owns ALL of the money you earn, and just kindly allows you to keep 40-50% of it (after adding in property taxes, sales taxes, social security taxes, taxes on the cable bill, taxes on the phone bill, taxes on the electricity bill, gasoline taxes, taxes on airline tickets, etc., etc.).
Posted by: WJ | Dec 28, 2009 12:07:18 PM
Go ahead and convert your IRA to a Roth. Later, when the government comes for your IRAs (it's just a matter of time), you will lose your tax exemption anyway. Get it straight: whenever they need it, YOUR money is THEIR money. And they will need it before you die. Unless you get (un)lucky.
Posted by: PD Quig | Dec 28, 2009 7:10:00 PM