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Hope you don't plan on having more than $3M in your IRA's

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mshan

Diamond Member
Nov 16, 2004
7,869
0
71
Cypress banking sector was very oversized for actual underlying economy (government sanctioned money laundering for Russian oligarchs), and capital requirements for banks (i. e. actual deposits) was lower than in U. S.

As for something similar happening here, this is what Zerohedge has said previously:



What was the point of Executive Order 6102? It was two fold.

First, in order to make the confiscation legitimate, the US government required the delivery of all gold coin, bullion, and certificates to be concluded by May 1, 1933 in exchange for $20.67/ounce. Several months later, the new, official gold exchange price (which however was merely the government's bid as nobody could actually buy gold at this price) became $35.00, which remained until 1971 when the last trace of the dollar's pseudo convertibility into gold was wiped out by Nixon. In effect, what FDR did was to devalue the USD by 70% overnight.

Second, not only did the government remove the incentive for ordinary citizens to hold gold by establishing price and criminal controls over possession, it also changed the rules in the middle of the game allowing it to build up a massive gold hoard of over 8000 tons today which is maintained at Fort Knox, and is, to the best of our knowledge, unauditable by any mere mortal. Critically, it made the US government the sole source and monopoly agent of gold purchases, using reserve fiat currency it could print with impunity, beginning in 1933 and continuing through 1974 when the limitation on gold ownership was repealed after President Gerald Ford signed a bill legalizing private ownership of gold coins, bars and certificates by an act of Congress codified in Pub.L. 93-373, which went into effect December 31, 1974. In summary, the US government, which is now the largest official holder of physical gold in the world, had 40 years of uncontested zero cost gold accumulation in which it could build a gold inventory that was second to none.

As for the process the government had in place to deal with those who refused to voluntarily hand over their gold quietly, curiously there was only one case of prosecution, which however should make it very clear that holding gold in "authorized" bank safes is about the dumbest thing one can do the next time the US government decides to devalue the dollar, and change the rules.


http://www.zerohedge.com/news/what-30-years-gold-confiscation-us-government-looks
 

BoberFett

Lifer
Oct 9, 1999
37,587
9
81
You can save as much you want for retirement, but only $3M will be able to be saved in an IRA and fall under its tax rules.

In the grand scheme of things, I just can't get to worked up about this. Our tax code is entirely fucked. What's one more rule going to do?
 

Fern

Elite Member
Super Moderator
Sep 30, 2003
26,916
172
106
-snip-

i'm honestly getting sick and tired of the government trying to decide what i need. How much money for retirement.
While that may be the case with Obama, the previous rule against excessive amounts in retirement plans was for a different reason. The rule allowing for deferment of income tax on amounts in retirements was born of a recognition that most Americans were not adequately covered for retirement (Defined Benefit Plans have all but disappeared etc.). So, tax breaks were established to encourage Americans to commit their own money to retirement savings.

However, it later became evident that some people were using these tax favored rules to amass money that was far in excess of (basic) retirement needs. You've always been able to amass as much as you like, but before the IRAs etc were established there were no tax favored accounts.

Once a person has amassed enough for 'basic' retirement needs there was no further govt policy interest in handing out more tax benefits.

Think of it as any other tax benefit. E.g., tax credits are now available for 'green type' business/products to help get them going in the market; to help them compete against the established non-green products. Once the green products can compete on their own and start dominating the market is there any reason to continue the tax breaks? Of course not, so you repeal it since it's no longer advancing govt policy but has merely become a give away of sorts serving no policy purpose.

Fern
 

Fern

Elite Member
Super Moderator
Sep 30, 2003
26,916
172
106
Its not like 3million is that much in a retirement account, especially not if there aren't plans to keep it current with inflation. Especially so with increasing life expectancy.
Yeah, I think the amount is too low. As we saw in 2008 (and in other years) $3 million can become $1.5 million (or if you were in Enron $0) or less pretty damn quick.

Back in 2000, a lot of stocks took massive hits, and not all of which were DotComs.

Fern
 

mshan

Diamond Member
Nov 16, 2004
7,869
0
71
Yes, I think the gist of proposal is only first $3 million of retirement assets can benefit from tax deferral (tax free compounding for decades).

The $9 billion in revenue it would create over next decade is probably low hanging fruit that won't hurt economic recovery in short term, but does help stabilize debt over next decade. (hopefully piece of stealth Grand Bargain being put in place quietly over time):

http://www.economonitor.com/dolanecon/2012/08/22/latest-cbo-budget-projections-underline-need-for-goldilocks-budget-deal/
 

glenn1

Lifer
Sep 6, 2000
25,388
1,013
126
Repost/Thread Merge

Fern
Super Moderator


Just great. Now not only do we need to deal with the phaseout of defined benefit (pension) plans in the workplace, Obama wants to limit our defined contribution (401K) and IRA plans now. Heaven forbid I put aside few hundred thousands over the course of my working years, and with a bit of stock picking luck manage to turn that into a decent seven figure nest egg. No Sir-ee, Obama will make sure you don't enjoy any outsized investment returns and thus be able to live any more comfortably than the average moron who gets a new leased car every year and relies on Social Security to pay for their monthly ration of cat food.

http://money.cnn.com/2013/04/10/retirement/obama-retirement-saving/index.html
 
Last edited by a moderator:

glenn1

Lifer
Sep 6, 2000
25,388
1,013
126
I think you can buy a lot more than cat food for $200,000/year...
You're missing the point. IRA and 401K contributions are already limited by income, this is going a step further to say you can only enjoy a certain amount of investment returns before Uncle Sam decides you have too much money in your account.

Also, it's changing the rules people relied on for their retirement planning. Roth IRAs for example were sold on the premise that your contributions are post-tax, and thus earnings are not taxed later. This proposal blows up that arrangement.
 

xBiffx

Diamond Member
Aug 22, 2011
8,232
2
0
Never happen. The fact that its being talked about seriously in Washington is the worrisome bit.
 

sixone

Lifer
May 3, 2004
25,168
3
61
Never happen. The fact that its being talked about seriously in Washington is the worrisome bit.
They are desperate to keep buying votes. Now that it's public, they'll stick with it until they find a way to make it as palatable as Obamacare was, when they passed it.
 

Zargon

Lifer
Nov 3, 2009
12,245
2
76
I could see placing a limit on how much you can put in annually without penalty(doesnt that exist? or is it just for IRA's?

but an overall cap on how much you can save? freaking great idea :rolleyes:
 

nehalem256

Lifer
Apr 13, 2012
15,670
6
0
You're missing the point. IRA and 401K contributions are already limited by income, this is going a step further to say you can only enjoy a certain amount of investment returns before Uncle Sam decides you have too much money in your account.
At an amount far beyond what anyone needs for retirement.

The purpose of special tax advantaged retirement accounts is so people can save for retirement. Not so you can hide money from taxation.
 

chucky2

Lifer
Dec 9, 1999
10,038
36
86
You know how much I need for retirement? Exactly how much I decide - at any time - I need for retirement.
 

Mursilis

Diamond Member
Mar 11, 2001
7,760
11
81
Just great. Now not only do we need to deal with the phaseout of defined benefit (pension) plans in the workplace, Obama wants to limit our defined contribution (401K) and IRA plans now. Heaven forbid I put aside few hundred thousands over the course of my working years, and with a bit of stock picking luck manage to turn that into a decent seven figure nest egg. No Sir-ee, Obama will make sure you don't enjoy any outsized investment returns and thus be able to live any more comfortably than the average moron who gets a new leased car every year and relies on Social Security to pay for their monthly ration of cat food.

http://money.cnn.com/2013/04/10/retirement/obama-retirement-saving/index.html
Welcome to America, where we reward the stupid and short-sighted, and punish the productive types who take the long view.
 

Zargon

Lifer
Nov 3, 2009
12,245
2
76
At an amount far beyond what anyone needs for retirement.

The purpose of special tax advantaged retirement accounts is so people can save for retirement. Not so you can hide money from taxation.
says you


you do pay taxes on 401k's. on the tail end. so now you will pay taxes on the balance.....and when you remove it? getting taxed twice is awesome:ninja:
 

IronWing

No Lifer
Jul 20, 2001
60,190
12,693
136
This idea, at least as explained in the article, makes no sense. Say I have $20 million throwing off $200k per year at today's crappy 1% savings rates (ignore other investments for simplification). I'm good. Then one day the bond market wakes the hell up and interest rates jump to 5%. Now my $20 million is throwing off $1 million a year and I'm supposed to immediately reduce my balance to $4 million to satisfy this proposal. After a bit of 5% rates the economy tanks and interest rates plunge back to 1% but now I have $4 million instead of $20 million.

Why this and not capital gains taxation reform? That's where the big money is.
 

xBiffx

Diamond Member
Aug 22, 2011
8,232
2
0
This idea, at least as explained in the article, makes no sense. Say I have $20 million throwing off $200k per year at today's crappy 1% savings rates (ignore other investments for simplification). I'm good. Then one day the bond market wakes the hell up and interest rates jump to 5%. Now my $20 million is throwing off $1 million a year and I'm supposed to immediately reduce my balance to $4 million to satisfy this proposal. After a bit of 5% rates the economy tanks and interest rates plunge back to 1% but now I have $4 million instead of $20 million.

Why this and not capital gains taxation reform? That's where the big money is.
Obama hates the middle class. :|
 

sixone

Lifer
May 3, 2004
25,168
3
61
At an amount far beyond what anyone needs for retirement.

The purpose of special tax advantaged retirement accounts is so people can save for retirement. Not so you can hide money from taxation.
Freedom is not about need. It's about being able to keep what you earn.

Why do you hate freedom?
 

Moonbeam

Elite Member
Nov 24, 1999
66,489
3,250
126
Freedom is not about need. It's about being able to keep what you earn.

Why do you hate freedom?
Then you'll have no problem with slavery because you won't earn anything unless, of course, freedom is about something more than keeping what you earn, like ones reciprocal duty to the state for it's proper functioning as a device for insuring that my freedom doesn't result in your slavery. Tax is the cost of freedom and a constitutional right the government can impose. Your say in the matter is your ability to lobby, to vote, and to appeal to the courts, etc. Think of yourself as a parasite that grows fat on the larder created by the society the state creates and facilitates. Once you could maybe have been free in a jungle, but most nations now rule there too. Unfortunately a single human in a jungle doesn't earn much than you will after your IRA taxes are paid and you won't have to slap nearly as many mosquitoes, thanks again to spraying by the state.
 

sixone

Lifer
May 3, 2004
25,168
3
61
Then you'll have no problem with slavery because you won't earn anything unless, of course, freedom is about something more than keeping what you earn, like ones reciprocal duty to the state for it's proper functioning as a device for insuring that my freedom doesn't result in your slavery. Tax is the cost of freedom and a constitutional right the government can impose. Your say in the matter is your ability to lobby, to vote, and to appeal to the courts, etc. Think of yourself as a parasite that grows fat on the larder created by the society the state creates and facilitates. Once you could maybe have been free in a jungle, but most nations now rule there too. Unfortunately a single human in a jungle doesn't earn much than you will after your IRA taxes are paid and you won't have to slap nearly as many mosquitoes, thanks again to spraying by the state.
Slavery is prohibited by the Constitution, in case you didn't notice. That won't change if taxes don't go up.

Income taxes are never ever going to go down. So it's in the government's best long-term interest to keep that money in people's IRA's and take a higher tax rate when it comes out. Instead, these dumbass politicians want to tax it now, for short-term gain.

The government isn't spraying mosquitoes. It's killing the birds that eat mosquitoes, because the mosquitoes will be someone else's problem later.
 

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