And what about using the “back door Roth IRA” to get around the Roth IRA’s income test? What about when the IRS says the back door Roth is allowed?

https://www.currentfederaltaxdevelopments.com/blog/2018/7/12...

Can you honestly say when the people were drafting how IRAs would work they were thinking this as an intended use-case?

Can you say why employees of large and well funded businesses get to save $23k+ per year in 401k, but employees of small and less well funded businesses can only save $7k per year in an IRA?

You don't have to be large and well funded. You do have to have your own SEP-IRA, rather than a regular IRA, and almost any self-employed person could do that. I am self-employed, my business is essentially a sole proprietorship, and I get the higher limits because of the type of IRA.

So the question is really: why do some people only get to save $7k a year in an IRA and others get to save much, much more?

I never wrote about self employed, I wrote

>employees of small and less well funded businesses

For example, a startup without the funds or time to do all the HR to allow for 401ks is disadvantaged because their employees cannot contribute as much to a retirement account as someone who works for a business that offers a 401k (or for themselves).

A person has the following choices:

1) work for a business offering a 401k (usually larger, well funded, etc)

2) work for themselves

3) work for a small, upstart business (usually smaller, not as well funded, etc)

Why does working for #3 disallow you from saving as much for retirement? Why are tax advantaged retirement savings a function of your employer at all?

Same for paying for health insurance with pre-tax income.

The rule of law, and the democratic lawmaking process is based on text, not mind reading.

Well I can pull up exactly what proponents of The Taxpayer Relief Act of 1997, which introduced the Roth IRA, stated their intentions were since this is very easy to find and widely documented but I strongly suspect you don't actually give a fuck about reality.

So my time spent on this ends now.

The intentions of lawmakers when making laws do not matter; the thing that is voted on and passed is the text of the law, not their intentions.

"intended use-case" is just more fuzzy language. They probably thought everyone would buy mutual funds, rather than 3X leveraged Nvidia ETFs. Does that mean buying such ETFs (and making bank) mean you're not paying "your fair share"? Or for something more down to earth, what about meme stocks and bitcoin treasury companies, both of which are technically companies, but are definitely not what the authors of the bill had in mind.

The purpose of IRAs is clear from the name - Individual Retirement Account. It was intended to allow individuals to save more effectively for their own retirement, and the justification for it centered around providing incentives for people who might not otherwise save enough.

At least, that was the publicly delivered account.

For a billionare who can already retire in comfort few will ever know to be using any kind of IRA for any purpose is outside of the publicly given justification for their existence.

>For a billionare who can already retire in comfort few will ever know to be using any kind of IRA for any purpose is outside of the publicly given justification for their existence.

So if you're sufficiently rich (by some arbitrary amount), you're now a "tax evader" and "not paying your fair share"? Can we say the same about other deductions, like the standard deduction? I doubt you'll be able to find a politician that answer "yes" to "do you think bill gates' first $14.6k in income should be tax-free?", does that mean that's "tax evasion" too?

The authors of the Roth IRA, which initially had a $2,000 annual contribution cap were not intending it to be used by someone with $21,800,000,000 to avoid taxes on $5,000,000,000.

I really don't know how this is difficult unless you're trying to be a troll or somehow miraculously don't comprehend how numbers work.

Not at all.

The standard deduction has an entirely different purpose which is not negated by extremely high income and/or wealth.

IRA's, however, were set up for a specific purpose for which Thiel is not the target.