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Posted by on March 8, 2007, 3:44 pm
Under current law the $100,000 adjusted gross income ceiling for Roth
conversions will be removed in 2010. If the Democrats regain the
presidency in 2008 and keep control of Congress, is it likely that
they will repeal this provision? I don't want to make a non-deductible
IRA contribution and not be able to convert in 2010.
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Posted by joetaxpayer on March 8, 2007, 5:13 pm
beliavsky@aol.com wrote:
> Under current law the $100,000 adjusted gross income ceiling for Roth
> conversions will be removed in 2010. If the Democrats regain the
> presidency in 2008 and keep control of Congress, is it likely that
> they will repeal this provision? I don't want to make a non-deductible
> IRA contribution and not be able to convert in 2010.
Keep in mind, what would occur in 2010 would be a revenue generator in
2011/12. Note, revenue would decrease at some point in the future, but
the conversion is a short term boost to tax income. So wouldn't anyone
in office want this? It makes the deficit look better, and the long run
is, well, far off.
JOE
JoeTaxpayer.com
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Posted by Gil Faver on March 8, 2007, 7:23 pm
> Under current law the $100,000 adjusted gross income ceiling for Roth
> conversions will be removed in 2010. If the Democrats regain the
> presidency in 2008 and keep control of Congress, is it likely that
> they will repeal this provision? I don't want to make a non-deductible
> IRA contribution and not be able to convert in 2010.
>
yes, the democrats will do everything they can to screw you. Thanks for all
your hard work.
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Posted by Mark Bole on March 8, 2007, 9:11 pm
Gil Faver wrote:
>>Under current law the $100,000 adjusted gross income ceiling for Roth
>>conversions will be removed in 2010. If the Democrats regain the
>>presidency in 2008 and keep control of Congress, is it likely that
>>they will repeal this provision? I don't want to make a non-deductible
>>IRA contribution and not be able to convert in 2010.
>
> yes, the democrats will do everything they can to screw you. Thanks for all
> your hard work.
From the charter for this group: "[...] and political opinions should
be directed elsewhere".
However, leaving aside partisanship, it is a fact that tax laws are
subject to change. A taxing authority, such as the U.S. government,
would most likely prefer that ordinary people trust in its stability and
absence of abrupt, arbitrary changes.
What you have to fear more than revocation of a 3-to-5 year future
commitment, in my opinion, is *lack* of a next-year future commitment
(such as the continued extension of sales tax optional deduction,
tuition and fees deduction, AMT temporarily higher deduction, and so on).
Of course no one has committed to the future of non-cash charitable
contributions, so don't count on that at all! ;-)
-Mark Bole
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Posted by on March 9, 2007, 4:59 am
>
> What you have to fear more than revocation of a 3-to-5 year future
> commitment, in my opinion, is *lack* of a next-year future commitment
> (such as the continued extension of sales tax optional deduction,
> tuition and fees deduction, AMT temporarily higher deduction, and so on).
Given the likely fiscal position of the US government, I would suggest
this is a very good analysis. Easier for the Congress to do nothing,
and tax revenues to rise, than for it to do *something* which might be
seen to be hurting one group of taxpayers or another.
If you look at the history of past 'pulses' in US Federal Spending
(LBJ, Nixon, Reagan -- ie both defence and civilian) then they are
usually followed by long periods of tax increases/ slower growth in
government spending (Ford/Carter, Bush I/ Clinton).
(that's not to say that is what the Presidents in question intended to
do, when they came to office. It's just how the nature of domestic
and international political challenges played out)
This, I would tender, is true regardless of the partisan stripe in the
White House and/ or the Congress. Although history says that when one
party controls both houses and the White House, spending accelerates,
(FDR, LBJ and Bush II were the only 3 modern presidents where the
President's party controlled both Houses, I believe, and I believe
they also each orchestrated the largest sustained rise in Federal
spending), and it decelerates when control is split.
The implication for personal financial planning is as Mark's excellent
analysis suggests: plan on 'stealth' tax raises, eg by non-extension
of current reductions.
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