Obama wants to cap your retirement.
Inside his new budget he is proposing to cap qualified retirement savings at $3 million.
That's how much the White House figures it would take to generate $200,000 worth of income annually. However the problem with such an approach as investment news points out as that and in the historic low interest-rate environment it takes more money to produce $200,000 worth of income which is all you apparently need in retirement according to them—of course they’ll never live on such a pittance.
It is unclear if the administration wishes to tie the size of retirement accounts to interest rates.
Can you imagine a world where suddenly you have too much money in your retirement account according to the government because interest rates went up 1%?
Only in Washington DC could they come up with such a complex plan and call tax reform.
There are already limits on how much you can put into an individual retirement account 401(k) and other qualified plans. What happens with that money after that has largely up to the individual-- as it should be.
Now they just want to make sure that you aren’t too successful as an investor.
Can we please stop penalizing success?
Obama will unveil the $4 trillion budget proposal the heart of which includes so-called corporate tax reform. Both Republicans and Democrats recognize the need for lowering corporate tax rates to be more competitive with other countries. But what they won't agree to is how much those rate should be lowered.
Additionally both sides are looking to tax money held off shore by US corporations--and again the two are divided by how much should be taxed.
In all it will lead to another year of uncertainty for US businesses about taxes.
Let’s make it clear GOP: We should never be thinking about taxing profits from overseas.
Besides lacking jurisdiction, the world needs more tax competition.
Consumers took advantage of holiday pricing and did their shopping early for Christmas last year. And that led to a larger than expected drop in consumer spending, the largest in fact on five years.
The Commerce Department reported that consumer spending went down 0.3 percent in December after going up by half a percent in November. Economists surveyed by Bloomberg expected consumer spending only to drop by 0.2 of a percent for December.
That likely means that much of the extra cash because the falling oil prices is now in the economy.
But the good news is that wages were up 0.3 of a percent in December, an annual pace that would see household incomes rise over 3.5 percent annually.
But wage inflation is the one place the Federal Reserve hates to see inflation. So congratulations America on your bigger paycheck.
Now knock it off.
If you're the parent of a special needs child-- a child with disabilities-- you will soon have a new tool to pay for qualified expenses. In the tax extenders bill signed in December 2014 there was a provision to open up 529 accounts to families with special needs children who have qualified medical expenses. Although these families concurrently use a special needs trust to pay for medical expenses, the 529 account offers some taxes advantages over trusts. Like trusts however they are designed to limit the amount of personal assets the disabled child has for the purposes of qualifying for aid. States still have to set up their own framework for opening these new 529 accounts, called able accounts. According to experts that should take about another year.