Mitt Romney’s unfathomably large IRA was a big political liability for him in 2012.
Fortunately for other financial titans who hope to be president, it’ll be hard in the future to skirt the rules and amass such enormous, tax-deferred savings — if President Obama gets his way.
A new provision in Obama’s budget “[e]nds a loophole that lets wealthy individuals circumvent contribution limits and a cumulate millions in tax-preferred retirement accounts,” according to a budget summary released by the White House. The White House is unveiling its new budget Wednesday.A senior administration official confirmed to TPM that the provision is a fresh addition to Obama’s budget, and intended to close the loophole that allowed Romney to amass upward of $100 million in his individual retirement account.
IRAs are intended to allow workers to put away modest sums of money each year in order to help finance a middle class retirement. The savings are tax-deferred, but there’s a legal limit — now $6,000 — on how much an IRA holder can contribute annually. Experts critical of Romney suspect he skirted that limit by making investments in Bain Capital projects through the IRA and dramatically lowballing the value of the stakes.
The budget also proposes ending the so-called carried-interest loopholes, that allows financial managers to pay tax on what most would consider labor income at a lower capital gains rate.