Writing in USA Today, former U.S. Senator Max Baucus (D-Mont.) raises serious concerns with a proposal being pushed by President Joe Biden and Democrats in the Reconciliation package. The proposal would fundamentally damage traditional and Roth retirement savings accounts (IRAs and Roth IRAs), including mandating forced divestiture and retroactive taxation.
Senator Baucus writes, “Taxpayers must be able to trust that Congress will honor its promises, especially for those saving for retirement… Americans who relied on the law when they made their investment decisions should not be subject to retroactive taxation.”
The Democrats’ proposal, championed by Senate Finance Committee Chairman Ron Wyden (D-Ore.), changes the rules in the middle of the game for retirees. Democrats’ proposal bans after-tax contributions from being converted to Roth regardless of income level, requires government audits of IRAs, requires forced divestiture of private investments, and subjects investors to retroactive taxation.
Baucus raises concerns with these proposals, writing “Traditional IRA holders expect their withdrawals to be taxed when they decide to withdraw. Not earlier because the government has suddenly changed the rules.”
The Biden IRA proposal is estimated to raise just $4 billion over the next decade. That is 0.1% of the total cost of the Democrat’s $3.5 trillion reconciliation package.
Savings for retirement should be sacrosanct – and changes to retirement laws should be transparent and bipartisan. The Biden IRA plan is neither of these.
Read the full op-ed in USA Today here.
Learn more about the danger of Biden’s IRA plan here.