Originally Posted By Dabob2 Hell, his IRA alone could be worth 100 million. Even if it's 20 million (the low estimate), I'd still like to know how the hell an IRA - with yearly ceilings on how much one can contribute, in the low thousands - gets to be 20 million. Put another way: lots of people have been contributing to their IRA's since IRA's were invented. Many have been contributing the maximum every year. So how come Romney's is worth SO much more than anyone else's? How does that happen?
Originally Posted By Kar2oonMan >>I'd still like to know how the hell an IRA - with yearly ceilings on how much one can contribute, in the low thousands - gets to be 20 million.<< Maybe in this case, IRA stands for Incredible Romney Accounting?
Originally Posted By TMI "Don't forget the real possibility that Romney committed voter fraud in January 2010 when he claimed to be living in his son's unfinished basement during the special election so he could claim MA citizenship and vote for Scott Brown" If only they could pass a law requiring I.D. for lowlife voters like this guy, we could stop this fraud menace once and for all!
Originally Posted By dshyates I don't believe that Romney showed up at the polls and misrepresented himself. Which is what "Voter I.D." laws are purported to stop.
Originally Posted By SuperDry <<< I'd still like to know how the hell an IRA - with yearly ceilings on how much one can contribute, in the low thousands - gets to be 20 million. >>> I don't know what kind of IRA he has, but there are several kinds beyond the Standard and Roth IRAs that are available to most people. An employer can sponsor a SIMPLE IRA in lieu of a 401(k), and there's also a SEP IRA that's used mostly by business owners. The contribution limit for the SEP IRA is $50,000 this year. If you contributed the max to a SEP and a Standard over the past 20 years, and had some really good investments, you could achieve the low end of what Romney did. Some back-of-the-envelope calculations show me that someone that started with nothing in 2000, was eligible and contributed the max SEP and Standard IRAs each year since then and invested it all in Apple, would have over $10 million today. If I had to guess, he has some non-standard investments, such as private investment firms that were formed just for this purpose, held in his IRA, as a means to channel investment income that would normally be taxable into his IRA for tax-deferred treatment. These companies could make an unlimited amount of money and no tax would be due since they were held in an IRA. Well, none due today at least. Under current law, they'd eventually be taxable when Romney or his heirs eventually took the money out of the IRA, but his current tax returns would show this $20-100 million IRA with zero taxes paid. He could even sell the assets to lock in the gain and turn them into cash without paying anything in taxes today.
Originally Posted By SuperDry <<< I don't believe that Romney showed up at the polls and misrepresented himself. Which is what "Voter I.D." laws are purported to stop. >>> Sush! You're supposed to keep quiet about the fact that virtually all of the "voter fraud" situations that the Voter ID people bring up would not have been prevented by a mandatory ID law.
Originally Posted By dshyates "I don't know what kind of IRA he has, but there are several kinds beyond the Standard and Roth IRAs that are available to most people. An employer can sponsor a SIMPLE IRA in lieu of a 401(k), and there's also a SEP IRA that's used mostly by business owners. The contribution limit for the SEP IRA is $50,000 this year. If you contributed the max to a SEP and a Standard over the past 20 years, and had some really good investments, you could achieve the low end of what Romney did. Some back-of-the-envelope calculations show me that someone that started with nothing in 2000, was eligible and contributed the max SEP and Standard IRAs each year since then and invested it all in Apple, would have over $10 million today. If I had to guess, he has some non-standard investments, such as private investment firms that were formed just for this purpose, held in his IRA, as a means to channel investment income that would normally be taxable into his IRA for tax-deferred treatment. These companies could make an unlimited amount of money and no tax would be due since they were held in an IRA. Well, none due today at least. Under current law, they'd eventually be taxable when Romney or his heirs eventually took the money out of the IRA, but his current tax returns would show this $20-100 million IRA with zero taxes paid. He could even sell the assets to lock in the gain and turn them into cash without paying anything in taxes today." Maybe if he showed us his tax returns we would know what he did.
Originally Posted By SuperDry <<< Maybe if he showed us his tax returns we would know what he did. >>> Tax returns would answer few questions about the IRA. All it would show would be the amount of annual contributions to his Standard IRA (i.e. the one that everyone gets and is limited to $5000/year in contributions), as well as the current value of that account. If he has a SEP IRA in a separate account, then the annual contributions, annual earnings, current value, and even the existence of such an account would be listed nowhere on his personal tax return. So, if there are problematic issues on his tax returns, I would guess that the issues are not with his IRA.
Originally Posted By Dabob2 From what I've read, the max Romney could have contributed in many of the years in question was 30,000. It didn't go up to 50k until more recently. More astute finance heads than l have pondered it online and come up empty. As SD points out, even putting it all into Apple, a spectacularly succesful stock, would only have gotten him to 10M, half the low end estimate. The online folks are scratching their heads at how it could get to 20, and throwing up their hands at the thought of 100M. Even if it's 100% legit, it's an example of how the mega rich can game the system, IMO. IRAs were meant for the average person to supplement social security and save a little money tax-deferred. Not for the already ultra wealthy to use as essentially another tax shelter. It may be legal, but it deprives the treasury of plenty, which either has to be made up for by the rest of us, or (more likely) grows the deficit for no discernible benefit. I don't think even the most far right pundit could argue with a straight face that allowing the Romneys of the world to use an IRA in this way creates a single job.
Originally Posted By SuperDry <<< IRAs were meant for the average person to supplement social security and save a little money tax-deferred >>> Actually, I think it's the other way around. Social Security was the part that was intended to provide supplemental income for retirement, with the primary source being personal savings and/or a pension, and only secondarily as a safety measure in lieu of "welfare" for the elderly to keep people off the streets and out of the bread lines. Only as the decades went by did the mentality for Social Security turn it into something that many consider should provide a minimal standard of living all by itself, and where only the "well off" have extras like IRAs and pensions.
Originally Posted By Dabob2 Mmmmmm, I think it's kind of the other way around, in that IRA's came into being after traditional pensions started to become rare, and it was clear social security wasn't sufficient absent a pension. SS was ORIGINALLY intended to be the supplement, or a certain minimum floor, at a time when pensions were common. But when they began to disappear, and Congress realized that most people wouldn't have a pension and might have ONLY SS, then IRA's (and the 401k) were meant to replace them - thus why I said they were meant to supplement SS, as that was fast becoming the primary income source absent a pension.
Originally Posted By SuperDry I think you're right as well. My point was simply to address the notion that SS was ever designed to be a primary source of retirement funds.
Originally Posted By Dabob2 Yes. And my point was that as pensions disappeared, Congress invented IRA's so that the average person could supplement what was becoming the primary source (even if SS wasn't supposed to be that originally... de facto it was becoming that). The idea wasn't, IMO, to provide megawealthy people with yet another way to shelter their income to avoid taxes, and yet the Romneys of the world find a way to game the system to their advantage. Not really competing points.
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