Monday, April 8, 2013
The President released his budget proposal recently and it appears that the President wants to place a cap on the amount that individual can invest in an IRA. The budget plan "would prohibit taxpayers from accumulating more than $3 million in an individual retirement account." President Obama hopes that this cap will generate some $9 billion in taxpayer revenue over the course of the next 10 years. Some believe that this change came as a result of discovering Presidential candidate Mitt Romney's IRA. During the election, the public learned that his retirement accounts contained between $18.1 and $87.4 million. It was believed that it could have contained more than $100 million at one time.
The administration, however, has not explained how the cap would work. According to Bloomberg, "the cap would apply to the total of all of an individual's tax-favored retirement accounts." The problem that the administration will likely face is the implementation of the plan. Some argue that any plan to place a cap on IRA's would be difficult to implement.
See Richard Rubin & Margaret Collins, Obama's Budget Would Cap Romney-Sized Retirement Accounts, Bloomberg, Apr. 5, 2013.