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Author: billjam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75387  
Subject: Re: Roth vs. Traditional IRA Date: 9/3/2003 12:06 AM
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billjam wrote "I love the Roth but wonder about it's future. In the early 80's a conservative banker friend told me he didn't expect IRA's to last as they were structured at the time. His reasoning was that their success would cost the government too much immediate income. Sure enough a few years later Congress changed the rules and my contributions were no longer deductible.

I worry that the same thing will happen when people start taking withdrawals from Roth IRA's and not paying taxes on the gains. Congress, facing huge budget deficits, will change the rules and tax that income."


Sir Tas asked "Isn't there a purely practical problem here since people aren't keeping track of their cost basis and gains?"

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There are records of contributions. Everything else is a gain. Roth contributions could be handled similar to non-deductible contributions to a traditional IRA. Or they could just tax a percentage of all withdrawals similar to tax on SS benefits. Between Congress and the IRS they'll figure something out if the opportunity arises.
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