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Author: CCinOC Big gold star, 5000 posts Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 736171  
Subject: Re: 401K to Roth 401K conversions Date: 1/13/2013 10:01 PM
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vkg, here's a case in point:

A tax loophole contained in the Kemp-Roth Act (1981) was quickly exploited. For a time, wealthy people put millions of lump sum dollars into life insurance policies because of the (then and now) favorable tax treatment of life insurance policies. Per the Kemp-Roth Act, insureds subsequently took the gains tax-free. Uncle Sam recognized this and said, “Hey, where’s my cut?!”

The solution was to disallow big gobs of money to be put into life insurance policies. This was accomplished through the Tax Equity and Fiscal Responsibility Act (1982). TEFRA was created to generate revenue through closure of tax loopholes and introduction of tougher enforcement of tax rules. Uncle Sam, through Congressional action, said, “There…fixed that.”

Same thing here...Congress may rationalize that there's lots and lots of "revenue" to be gained from now-tax exempt ROTH IRAs. ("You didn't build that.") What can stop them from reconfiguring the tax laws so that they get what they think they need from a revenue rich target: your IRA?
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