Sorry…this is a little I-need-a-break-from-taxes-for-10-minutes-for-a-rant post.
Today I spoke to the third person this season who has taken all, or nearly all, of their money out of their IRA accounts in one shot because “Obama’s gonna take it away if I don’t.” SERIOUSLY?!? What is wrong with these people?!
I don’t listen to Beck or Limbaugh or those types…though these clients made it clear that they did. And apparently there’s a meme out there promoted in right-wing circles that Obama’s got some plan to tax away all their IRA money…and you need to cash everything in NOW if you want to avoid it. Say what you will about future tax rates, but I’m talking about people who, apart from their massive IRA withdrawals, have well under $50,000 of income annually. Their tax rates are 15% or less currently, and there’s no way in the world their tax rates are going to over 30%. But thanks to cashing in six figures of IRA money in one year, they’re paying tax on their lifetime of savings at an effective tax rate of 30% or more.
Way to go, radical right-wing talking heads! You’ve convinced seniors they need to fork over 30%+ of their life savings to the IRS. (Plus another 10% to the state tax man in many cases.) Hope you’re proud of yourselves.