The average person that's putting the max of $6k (or less) into their IRA is not impacted by this and it's business as usual for them.
I believe this is in response to people like Peter Thiel
https://www.propublica.org/article/lord-of-the-roths-how-tec...
What if - instead of the government keeping us to the lowest common denominator (social security) they encourage, educate, and allow everyone to be their highest common denominator?
Problem with the low/middle income is that where to begin? Rich people hire lawyers to do the work. Low/middle income like myself knows this is available but can't utilize it as we don't know where to start, how to do it, who to contact and can't afford to hire a lawyer.
I know tons of people don't know how our income tax rate bracket works.
I just learned yesterday that you can invest in bitcoin using self directed IRA. I am trying to figure out how to do it, but kind of lost.
If you read up on what Thiel (and presumably some others did), yes, they successfully invested using their IRA, but yes, they also took advantage of the tax status of a Roth to avoid paying capital gains tax.
They will not be retroactively penalized for this (the law doesn't work this way), but their doing this has now made at least some in Congress want to prevent this from being possible in the future, since it was not what the Roth IRA was intended to allow.
If more people were off SS, then the entire governments budget would go down - which requires less taxation. We've taken the opposite approach.. support consumerism and spending, thus the government taxation and expanding budgets grow higher as our population ages to support a wider group.
The wealth gap is freaking massive and growing. How are low and middle class people supposed to support themselves when they can't even get fair wages to support themselves and plan for retirement?
The backdoor Roth part of this... basically anybody making even an entry level Tech salary should be doing it. That's not just for the Peter Thiels of the world.
(By "should" I don't mean "I would prefer if policy were this"; I mean "this is what's smart to do right now, at an individual level, under current policy".)
Also the government should file your own taxes, right now tutbotax & friends currently only exist due to government lobbying.
I also got by reasonably well with college student loan debt.
I'm relatively privileged in the above ways. If I wasn't quite so lucky and set up for success I'd struggle a lot to afford to put money into retirement accounts.
I think the rich should pay their fair fucking share of taxes. It helps society. This loophole they're trying to get rid of actually means that those who are far better off than the rest of us, who are using these loopholes to avoid taxes will have to pay more taxes. Seems like a real win for the low and middle class people here.
How exactly do you hope to create better opportunities for the low and middle income class? Here’s one idea: open up opportunities for them to invest in qualified accounts, like IRAs, silly.
https://www.propublica.org/article/lord-of-the-roths-how-tec...
This type of opportunity is NOT available for low to middle class families, never will be. It's simply being exploited by the rich. These families live paycheck to paycheck more often than not, they're not going to have the ability to invest shares of a company or real estate into their IRA. THey're more worried about paying their bills and the next paycheck. They don't have the extra income to make these kinds of investments.
No, seriously, go read the fucking article and I think you'd understand instead of very clearly advocating for the rich like you are.
Of course, someone with lots of investments will have the luxury of just making the highest-payoff ones with their IRA funds.
Independently, in the rest of the bill [1] there are lots of reasonable things like a $10 million IRA cutoff limit.
1) https://www.advantaira.com/wp-content/uploads/2021/09/WM-Tax...
401k limits are ~20k/yr -- about 10% of your pre-tax if you are maxing out on a 200k SWE TC (or much less given an employer match). Easily, your 401k (and rolled over IRA) can reach 200k (20k x 10) in a decade with no growth, and much more with growth.
At that point, this bill is relevant -- do you really want all your holdings in public stock that gyrate wildly in value every 7yrs?
This is also a way of contributing to a Roth (IRA?) if you don't qualify for a regular Roth IRA (make too much money) or want to contribute more than the $6k limit per year.
Entrepreneurs can put up to 58k a year into a Solo 401k
One example: https://www.choiceapp.io/
But getting you angry enough to defend his wealth is much more difficult than obscuring the fact that you won’t be affected by them, so we instead get vague and scary warnings about the bill.