Why Would the IRS Steal Your Money?
The answer is simple and straightforward: our government is going to need your money—and lots of other Americans’—to keep our country running.
As of March 2009, our country’s national debt totaled more than $10.9 trillion (and the number continues to rise by $1 million every minute!). That amounts to $55,700 of debt for each adult in the United States. Yet this is a mere drop in the proverbial bucket compared to what the government will owe in benefits to Social Security and Medicare recipients far into the future, as well as in pensions to military and civilian government workers.
In other words, the true liability of the United States isn’t only the Treasury bills, notes, and bonds we sell to finance our annual deficit and keep the country running, but it’s also all of the promises we’ve made to make benefits payments in the future. Plus, we have many new governmental departments such as Homeland Security to be funded, not to mention two wars and the Army, Navy, and Marine Corps budget shortfalls. All told, our government’s debt list of projects, departments, agencies, bureaus, and programs is a mile long. And where do you think the Treasury is going to get its funding? From you!
Imagine it is April 15th. At the last minute, you drop off your tax forms at your local post office. You’re one of a hundred people lined up outside the post office, and you assume everybody is there for the same purpose—to pay taxes. But you’re wrong: forty of those folks (people with lower incomes) will be excused from paying any income taxes, while twenty people (the middle class) will pay merely a token amount. It’s the forty remaining in line (the upper-middle class, like you) who shoulder nearly all of the taxes.
That’s right. Forty percent of Americans pay one hundred percent of the tax bills. And guess what? It’s not enough! In view of this statistic, it’s easier to see the IRS’ motive for wanting to take as much of your retirement money as possible.
At this point, you may be thinking: But I’m not wealthy. Sorry—it doesn’t take a lot to be rich in the eyes of the IRS. Simply having your name on an IRA or 401(k) plan distribution list makes you a target. The IRS sees a huge amount of collective dollars—$47 trillion, to be exact—stashed away in IRAs and retirement programs. This has caused it to become extremely aggressive in taxing those assets. So you may not like it, but believe me, it’s true—the IRS has a big red bull’s-eye painted on your retirement plan.
I know it’s not fair, but we have little control over it. What each of us does have control over is taking the right steps toward protecting retirement assets from unfair taxes—taxes you may not even know you owe!
Read from Chapter One – ‘Tax Alternatives to the IRA Rollover’
