The Biden-Democrat plan to snoop on your bank account is in flux. This week, Sens. Ron Wyden (D-Ore.) and Elizabeth Warren (D-Mass.) made concessions to their proposal that would use the all-powerful IRS to have 24/7 access to Americans’ personal bank accounts. These ongoing concessions are an encouraging sign, but the campaign to use sweeping federal powers does not end with your bank account.
Now, President Biden and Congressional Democrats plan to deputize the IRS to snoop on your retirement savings. Section 138301 of their plan that passed the House Ways and Means Committee calls for mandatory IRA audits and reporting for any American with an IRA over $2.5 million. The intention: to punish the success and wealth of Americans while stripping away their privacy.
Biden’s Tax Hikes on Americans Start Next Year, Not 2032
A recent CNBC article signals Democrats and the White House know their policy is not only unpopular, but is a tax increase on the middle class and huge hit on savers. Now, however, they’re claiming the sweeping IRA changes would not go into effect for a decade, giving “ample time for individuals to carry out a conversion, and generate more tax revenue for Democrats’ policy agenda, according to tax experts.”
This is misleading. The delay would only apply to Roth conversions. Myriad of other IRA changes – just as damaging to the middle class – would go into effect immediately.
Ironically, by still allowing for Roth conversions until 2032, the Democrats’ proposals contradict themselves. For example, an investor could continue Roth conversions, but simultaneously reach Biden’s IRA account limit – forcing divestment and retroactive taxation. It’s claimed these IRA changes would “fund measures” of the $3.5 trillion reconciliation bill, with estimates show $758 million – $4 billion would be raised through tax hikes over the next decade. These funds are not worth taxing middle class Americans’ retirement security for.
Joe Biden: A Roth Raider?
Joe Biden campaigned on protecting retirees. And he’s been a vocal supporter of IRAs and Roth IRAs.
In fact, since their creation within the Taxpayers Relief Act of 1997, Roth IRAs have been a stalwart of Democratic policy. Not only are they named after their creator – former Sen. William Roth of Delaware – but then-Sen. Biden voted for the creation of Roth IRAs.
On the campaign trail, Biden believed “a sound retirement begins with years of diligent saving.” Rather than just encouraging American families to save, Biden claimed his plan would “ensure that middle-class families get a leg up as they grow their nest egg.”
Rather than encouraging “diligent saving” and giving “middle-class families a leg up,” Biden’s proposed IRA changes would actually make it harder for average families to save and retire comfortably.
In April, it was expected President Biden’s tax plan would build upon his decades of supporting Roth IRAs by encouraging more Americans to save for retirement – specifically making “Roth 401(k), IRA and other retirement accounts more attractive than traditional, pre-tax accounts.”
Today, the Biden IRA Plan would not only make Roth IRAs less attractive investments, but downright impossible to convert traditional IRAs to a Roth, regardless of income level. This about-face on IRAs by Biden would penalize Americans who have followed the President’s advice, trusted legislation he voted for decades ago, and saved diligently for retirement.
If President Biden truly wants more Americans to save for retirement, he needs to tell Democrats that changes to IRAs are off the table. It’s time for Biden to stop misleading the public and reaffirm Congress’ commitment to hard working retirement savers.