The Senate Finance Committee is expected to mark up a bill on Thursday that would require permanent tax increases to continue funding federal highway projects through 2014.
Americans for Tax Reform (ATR), an advocacy group for lower taxes, said Wednesday that the brunt of the $9 billion cost of the bill would fall on the middle class.
According to ATR:
Under the chairman's mark, this "stretch IRA" concept, which is a conventional estate planning tool used by middle class families, would be abolished. In its place would be a requirement in most cases (surviving spouses being the biggest exception) that an inherited IRA be distributed over just five years. Thus, the tax deferral advantages of a stretch IRA are almost completely obliterated.
Unlike the type of estate planning tools used by rich Americans like Bill and Hillary Clinton, a "stretch IRA" is used by normal, middle class Americans and their financial planners (except maybe Vice President Joe Biden). This is the stuff of PBS pledge drive specials and walk in bank advertisements, and should not be confused with the complex estate planning that the uber-wealthy use.
To put it bluntly, this IRA tax increase is an income tax increase on the middle class. Because the entire bill is a net income tax increase, it also violates the Taxpayer Protection Pledge. ATR urges senators to oppose and vote against the chairman's mark on Thursday, and on the floor if necessary.