Roth IRA Conversion 2012: Are You a Good Candidate?

By David John Marotta     February 21, 2012

David John Marotta

A tax tsunami is coming at the end of this year. And this is the absolutely last chance for a massive Roth conversion. Two years ago the Bush tax cuts were extended for two years. But the snooze button is running out, and this time the likelihood of another extension is slim. You have just 10 more months to do a Roth conversion under these lower tax rates and move your money to where it will never be taxed again.

Regardless of your political persuasion, Congress agreeing to keep taxes low while we are experiencing the highest debt and deficit in our country's history is implausible. The best we can hope for is gridlock, which would mean the tax rates expire and return to their previously higher values. And while the classes are paying the highest share of their tax revenues in history, the masses are collecting an even higher share of government expenditures and subsidies. Higher taxes are in our future until we get spending under control.

The government gave you a tax write-off when you put money into your individual retirement account (IRA). Now the government can and will be changing the tax rate you have to pay when you withdraw the money. And when you turn 70 1/2, the government requires you to take at least the required minimum distribution (RMD) each year to force you to pay that tax.

How Greece Could Take Down Wall Street

By Ellen Hodgson Brown     February 21, 2012

Ellen Hodgson Brown

In an article titled "Still No End to 'Too Big to Fail,'" William Greider wrote in The Nation on February 15th:

Financial market cynics have assumed all along that Dodd-Frank did not end "too big to fail" but instead created a charmed circle of protected banks labeled "systemically important" that will not be allowed to fail, no matter how badly they behave.

That may be, but there is one bit of bad behavior that Uncle Sam himself does not have the funds to underwrite: the $32 trillion market in credit default swaps (CDS). Thirty-two trillion dollars is more than twice the U.S. GDP and more than twice the national debt.

CDS are a form of derivative taken out by investors as insurance against default. According to the Comptroller of the Currency, nearly 95% of the banking industry's total exposure to derivatives contracts is held by the nation's five largest banks: JPMorgan Chase, Citigroup, Bank of America, HSBC, and Goldman Sachs. The CDS market is unregulated, and there is no requirement that the "insurer" actually have the funds to pay up. CDS are more like bets, and a massive loss at the casino could bring the house down.

Two Years of Fears Have Disappeared

By Sy Harding     February 17, 2012

Sy Harding

Kudos to central banks.

The eurozone debt crisis produced two years of fears that it would result in financial collapse and a severe recession in Europe that would spread to the rest of the world.

But in November the central banks of Canada, England, Japan, Europe, the U.S., and Switzerland, took coordinated actions to provide liquidity support to the global financial system.

In December, the European Central Bank finally succumbed to pressure and launched a program providing substantial additional liquidity to European banks by making unlimited, low interest-rate, three-year loans available to banks.

The President’s Budget Tax Proposals

By Steven D Hamilton     February 17, 2012

Steve Hamilton

The President delivered his proposed budget for fiscal 2013 this Monday. The budget included as one of its five tax "reform" principles the following:

• Simplify the Internal Revenue Code

Sounds good. Here are some proposed tax "simplifications":

• Provide a temporary 10% tax credit for new jobs and wage increases
• Provide additional tax credits for investment in advanced energy manufacturing
• Provide tax credit for energy-efficient commercial building property expenditures
• Reform and extend Build America Bonds