Written with Kathleen Hunter
A tax-increase proposal inspired by Republican presidential candidate Mitt Romney’s portfolio won’t be included in a plan by Senate Democrats to avert automatic spending cuts as of March 1, a Democratic aide said.
The proposal would impose limits on taxpayers’ ability to put more money in accounts such as 401(k) plans and individual retirement arrangements once balances in those tax-advantaged accounts reach $2 million.
Romney’s IRA was worth as much as $87.4 million, he said in public filings last year that didn’t explain how it reached that level despite annual contribution limits that are now $5,500 for most taxpayers.
Romney, a co-founder of private equity firm Bain Capital LLC, could have put low-valued stock in the account and then had it grow exponentially. If the proposal had been in place, it would have limited Romney’s ability to continue putting more assets in the IRA.
Democrats such as Representatives George Miller of California and Chris Van Hollen of Maryland called for such legislation during the campaign last year.
“Evasion of contribution limits on tax-preferred retirement plans is a
significant problem that should be addressed as Congress looks to close the
nearly $400 billion annual tax gap” between taxes owed and paid, they said in a statement last year.
That idea will have to wait.