Washington (July 30, 2002) -- Chairman Jim Saxton of the Joint Economic Committee welcomed improved prospects for legislation ending tax discrimination against senior investors, under consideration by Congress later this year.
Saxton is the sponsor of H.R. 1368, a bill that would end mandatory withdrawals from Individual Retirement Arrangements by seniors after age 70½, a provision of current tax law designed to force income tax payments on these withdrawals. Seniors could roll over 401(k) assets into IRAs to receive the same tax benefit.
"I'm encouraged by the support this concept is reportedly gaining in Congress," Saxton said. "The law's requirement forcing distributions from IRAs is anti-senior and anti-saving. If seniors choose to conserve their resources for emergencies or other purposes, why should the tax law force them to undermine their retirement security? The only reason is to force tax payments from seniors at a time when many of them are most vulnerable to unforeseeable problems. Moreover, under current market conditions, this would force seniors to sell part of their assets at greatly depressed prices.
Mandatory withdrawals force tax payments that significantly erode the wealth of seniors, according to Saxton. "Moreover," he said, "with longer life expectancies and many seniors working later in life, the 70½-age trigger is unrealistically low. Many seniors have barely retired before being hit with stiff tax payments on withdrawals they do not want to make. This simply is age discrimination against senior savers."
"Seniors have saved for retirement, not to trigger premature, heavy tax payments at an arbitrary age.," Saxton added.
-- Electronic Accountant Newswire staff
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access