Rep. Dave Camp (R-MI), Chairman of the House Ways and Means Committee, may be pushing greater use of Roth IRAs as a way to generate more revenue without cutting limits on retirement savings, the Wall Street Journal’s John McKinnon blogs. As Camp begins to develop his tax reform proposal — which may include lowering the top income tax rate from 39.6% to 25% — one way to generate hundreds of billions in revenue is to through more use of Roths.
“Given that the way Congress ‘scores’ the tax cost associated with retirement savings incentives is completely wrong — they ignore the fact that it’s a deferral, not a deduction — the focus on Roths is not surprising,” says Brian Graff, Executive Director/CEO of ASPPA and NAPA.
Graff, who is quoted in McKinnon’s blog post, supports the use of Roths, noting: “Switching more savings to Roth-style accounts would ultimately produce more dollars for beneficiaries, at a time of concern about many Americans’ meager savings. That could be preferable to other changes that would harm Americans’ ability to save.”
What do you think about the use of Roths as an alternative to cutting the retirement savings limits? Use the comment box below.
