beliavsky[at]aol.com wrote:

- quote -

Not so far, not that I'm aware of. I wouldn't be surprised if we end up
seeing more uniformity among the different retirement-savings options
within the next several years, but the tax-free "any purpose" account is
a hard sell at this point. There's that big deficit, first of all,
which makes any costly cuts unlikely. And there arguably isn't the need
- current retirement savings schemes aren't anywhere close to being
fully used, so it'll be framed as a "helping the rich" kind of proposal.

But the biggest thing against its passage, I think, is AMT. At some
point in the next several years they're going to need to repeal or
completely change it, and assumedly it's factored into current revenue
projections. I don't know how it would be possible to fund an AMT tax
cut while also allowing the proposal - where large amounts of investment
dollars would be permanently sheltered from tax. It might be possible
after AMT reform, and after the revenue picture changes, but at this
point how could it be paid for?

-Tad

beliavsky[at]aol.com wrote:
- quote -

In an election year, you have to treat all proposals with a
healthy dose of skepticism, because some are proposed
primarily to *have* them shot down and/or to simply be able
to tell an interest group that "I tried" when, in fact, the
politician has little or no interest in the idea.

Given the current situation, if you are sharp, you include
something in there that is *sure* to have 40 votes against
it in the Senate and then refuse to give that point up. And
you twist arms to assure that it *doesn't* get put into the
budget bill, since that one can get through on only
Republican votes.

By the way, I'm not saying this to be anti-GWB. All
Presidents have played this game in election years--and the
Democrats in Congress will play similar game. But they have
an easier time as the minority party, since there it's a lot
easier to assure your proposal won't pass <grin> . GWB has
to finesse it a bit more since his party has majorities in
both houses, so being unable to invoke cloture in the Senate
is about the only tool he has available to be able to both
a) assure the proposal doesn't pass and b) to be able to
blame it on "them" (after all, if you can't get your party
to vote for it, then you look weak--you've got to be able to
blame it on the other party <grin> ).

The best example of the game comes from 1992. That year the
Congress, in control of the Democrats at the time, passed a
national health insurance proposal. As expected, then
President George Herman Bush vetoed it, and that gave their
candidate (a guy named Clinton) a talking point in the
campaign. However, a year later when they had someone who
clearly *would* sign the bill, they couldn't get it passed.
The fact it would be signed into law made it much more
politically risky to vote for the bill <grin> . And the
inability to get a bill out of Congress made Clinton appear
to be inept and weak (I've always thought Clinton's
political career was actually saved by the 1994
election--the Republican Congress allowed him to play the
political game I'm talking about for the rest of his
Presidency <grin> ).

That said, I believe the President is proposing to take
another run with the same idea. How serious he is, though,
is open to question since last year, aside from making the
proposal to a huge fanfare, he did virtually nothing to push
the proposal forward. As I noted above, he *didn't* put it
in the budget process, unlike the dividend proposal.

If and when we get a bill in a conference committee, then
I'll begin to think about the issue. But until then I tend
to treat anything proposed this year as likely political
positioning material--and there will be a bunch of that <grin> .

--
Ed Zollars, CPA
Phoenix, Arizona

In early 2003, the Bush administration proposed new Roth-like IRAs
(the money is tax free when taken out) with expanded constribution
limits, but it then abandoned them to push for other tax cuts. I have
read that it plans to make expanded retirement savings accounts a
campaign issue this year, but I have not read any details. Has
anything been proposed?