Can we go over some of the specific proposed bills that would affectfund investors?
A. Sure. The mother of them all came on January 31 when the President’sbudget proposal included creating two major new investment/saving vehicleswith major tax savings. Q. You’re referring to the “Lifetime Savings Accounts “(LSAs) and”Retirement Savings Accounts” (RSAs), I assume. A. Exactly. This is a huge proposal that would have MAJOR revenue-lossimplications. It would be mildly good for savings rates in the economy butwould widen government deficits for quite a while. Q. Can we take them one at a time? A. The proposed LSAs would be like giant Roth IRAs with fewer restrictionson use of the money. The proposal is to let anyone, regardless of age orincome level, put as much as $7,500 away every year in a special account.Contributions, as with Roth, would NEVER be deductible. But any gainswould never be taxable, so all withdrawals would be tax free. There wouldbe no minimum holding period, no forced minimum withdrawals at some certainage, none of that. Q. It sounds like a big tax break
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