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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 75626  
Subject: Re: Cancellaton of Tax-free Roth Withdrawals?? Date: 11/30/2010 10:39 AM
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Look at what they did in the 1986(?) tax reform. Social Security payments became taxable. But your contributions into SS was with after-tax money, so the money that SS pays you should not be taxed since it was already taxed once.

The argument was that most of SS benefit hasn't been taxed. Yes, what the employee paid in was taxed. But the half the employer paid in was not. In addition, SS benefit for most people far exceeds the total paid in so they said the difference (accumulated investment income) should be taxed. You may not like it but there is some logic to it.
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