Roth IRA: Write to Congress!
How do you give taxpayers a benefit, without causing a budget deficit or inflation?
The answer is simple: by liberalizing income and contribution limits on Roth IRAs.
That would certainly be a tax benefit for people who participate, albeit one that's delayed until they retire.
But the delay has a benefit of its own, because it puts off most of the tax revenue shortfall until the future, when the federal debt will presumably be history.
What about inflation?
Tax breaks are only inflationary when people spend too much of their refund instead of investing it;
when consumer demand for goods and services increases faster than the supply, prices naturally go up.
But IRAs work in the opposite direction, stimulating the "supply" side of the economy rather than the "demand" side:
when you encourage people to invest instead of spend, the investment helps companies grow and produce more.
So you get abundance, rather than inflation.
If you like the way that sounds, you should really consider writing to
your representative and senators,
and urging them to support legislation liberalizing limits on the Roth IRA.
Note: Since this page first went up, Congress acted!
Roth IRA contribution limits are gradually going up, starting with contributions made for the 2002 tax year.
The limit for 2002 is $3000 ($3500 if you are 50 or over), still subject to restrictions related to your income level and filing status.
Stay tuned to the sources listed on the links page.
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