So is it Max? - Nathan Newman
The deposits to the Roth IRA's are with after-tax dollars, so they are not necessarily any worse than the other type of IRA where deposits are tax free and withdrawals are fully taxed. There are income limits to both, so we are not really talking about the dynastic fortunes. In the latter connection, the worst parts of the tax code are the preferential treatment of capital gains, and the potential repeal of the Estate Tax.
We tend to gloss over the fact that very few people, as a share of the population, were subject to the top rates of 39.6 and 36 percent. Maybe one or two percent. So the reductions in these rates were also egregious from a distributional standpoint. These and the above are huge revenue losses, compared to the Roth IRA's. You can see for yourself if you go to the web site of the Joint Committee on Taxation, which has an itemized run-down of the cost and distribution of the tax bill.
As far as IRA's go, there are progressive ways to incorporate them into a tax system that I have tried to write about. So I can't really pose as an inveterate foe of savings preferences.
mbs