One way experts believe financial managers avoid the current annual contribution limit to IRAs is by using IRAs to participate in investments and assigning those investment interests a nominal value vastly below fair market.
Obama wouldn't curb this practice directly. Instead his budget calls for an overall cap of about $3 million on the net balance across all of an individuals' tax-preferred accounts. Only have one IRA? It can hold $3 million. Have three? Their holdings must sum to $3 million or less.
The $3 million figure is approximate. A formula would set the cap at a level just high enough to finance an annual distribution of no more than $205,000 per year in retirement for someone retiring this year.
By limiting the extent to which wealthy people can skirt the current annual limits and thus hide money from the IRS, the administration expects such a rule would raise $9 billion over 10 years.
Fortunately for Romney himself, the rule probably won't become law anytime soon. And even if it did, according to the Treasury Department, it wouldn't take effect until the beginning of next year and then only apply to contributions and accruals thereafter.