Tag Archives: irs

A Question for Joseph Stack

Apparently, Joseph Stack flew his plane into an IRS building, out of concern that the Treasury Department was stealing from the middle class.

If Mr. Stack thought the right bomb, in the right place, at the right time could change the policies of the Treasury Department, why didn’t he fly that bomb into Mr. Geithner’s office?

Perhaps he hoped enough paperwork would be destroyed by attacking the bureaucracy that others would be sympathetic to future attacks on the Treasury Department?

Certainly a small-scale attack on the IRS bureaucracy will not lead to any change in policies in the way a successful attack against the Treasury Secretary would. However, it would be interesting if CNN or other news outlets follows up on this in one year, and reports the number of businesses that were not audited because of this act of terror.

Protecting Retirement Savings

Supreme Court rules IRAs can be shielded from creditors,” CNN, 4 April 2005, http://www.cnn.com/2005/LAW/04/04/scotus.bankruptcy.ap/index.html.

Sometimes a kind policy and a wise the same thing. This is one of those times.

The Supreme Court on Monday ruled that creditors may not seize Individual Retirement Accounts when people file for bankruptcy, giving protection to a nest egg relied upon by millions of Americans.

The unanimous decision sides with a bankrupt Arkansas couple fighting to keep more than $55,000 in retirement savings. As a result, IRAs now join pensions, 401(k)s, Social Security and other benefits tied to age, illness or disability that are afforded protection under bankruptcy law.

IRAs should not be treated any differently because the benefits are tied to people’s age, the court said.

I can’t comment on the points of law, but this is a great decision. It is important to raise America’s savings rate, and retirement savings is a great way to do this. However, if individual retirement accounts were subject to bankruptcy seizures, less people would use them. If creditors could take them, this would increase their risk and decrease their attractiveness.

With this decision, the Supreme Court furthers a 21st century economy. Centrally controlled pension systems have had this protection for decades. Now individual investors also share in their benefits.