I noted in the previous post that the latest tax cuts passing through Congress "raise revenue" to offset a tiny portion of the overall tax cuts by actually losing more revenue, the device being to hurt the government's long-term financing by paying people to convert traditional IRAs into Roth IRAs.
Len Burman at the Urban Institute has the details. The IRA provision in the legislation is scored as a $6.4 billion revenue-raiser over the next ten years. But its estimated long term revenue consequence, in present value terms, is a loss of $16 billion.
Corporate executives who did this sort of thing would go to jail. Come to think of it, there's a pretty good chance that a lot of the people behind this brilliant initiative will end up going to jail, albeit for different reasons.
One last amusing detail: the tax-cutting legislation is entitled the "Tax Increase Prevention and Reconciliation Act." First you put in phony sunsets that hold down the revenue estimates. Then you call extending the tax cuts "Tax Increase Prevention." Then you do it again, since the extension is only for 2 years.
"Orwellian" has become such a cliche - how can we freshen it up when it is needed so regularly?
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3 comments:
Agree 100%. Congress proposes to pay for a tax cut with another tax cut. Obviously the conversion of a traditional IRA to a Roth is a tax cut in present value terms, otherwise no one would do it. What a scam.
Nicely put. I should have said it that way (Congress is paying for a tax cut with another tax cut).
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