From: "Mark Freeland" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Barron's article on future taxation of Roth IRAs
Date: Sun, 4 Mar 2007 17:29:40 -0600
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"Elizabeth Richardson"  wrote in message 
news:j9CGh.99293$5j1.22226@bgtnsc04-news.ops.worldnet.att.net...
>
> While I fully recognize the non-taxability of Roth earnings is very
> attractive, I consider that feature to be lesser than it's immunity from
> RMDs. Does anyone question this feature will not be maintained? Does
> anyone think Congress will add RMDs to Roths if/when it adds back taxes?

Interesting question, since I've been thinking that this is more likely than 
taxing Roths.  Consider that the "contract" that Congress has made with 
taxpayers is that they don't get (income-)taxed twice.  But IMHO there is no 
similar promise that Roths are "forever".  In fact, since Roths, boiled 
down, are just pre-paid IRAs, anything else about them can be viewed as 
technical details, subject to change (such as 5 year requirement on 
conversions was tightened up after the government realized its sloppy 
crafting).  Also, it's not as though there are no RMD requirements on Roths; 
there are, but only for inherited Roths.

For those who would bring up Social Security - "only" 85% is subject to tax, 
based on the argument that the growth has not been taxed already, only the 
original "contribution".  So it would not shock me to see Roth earnings 
taxed, but not the original contributions.  Taxing Roth contributions is 
about as likely as taxing non-deductible traditional IRA contributions.  (In 
fact, if Roth earnings are taxed, you're simply back to a non-deductible 
IRA.)

Finally, note that one of the items in the article is a backdoor way of 
getting at RMD - taxation on excess accumulations.  How do you avoid excess 
accumulations?  Take distributions - implied RMDs.

Mark Freeland
BnetOnewsX@sbcglobal.net