Patriotic Millionaires Chair Morris Pearl said that he is tired of tax cuts for the rich being sold as help for the poor. The 2022 Omnibus bill’s Secure 2.0 Act is in his crosshairs. It uses this as a pretext for making retirement accounts more flexible, but it is a giveaway to the wealthy.
Morris Pearl comes out against Secure 2.0 Act
Morris Pearl, chairman of the Patriotic Millionaire also sent a press release stating the following about the new omnibus bill’s Secure 2.0 Act.
“I’m tired of tax cuts for the rich being sold as help for the poor. The retirement changes in the omnibus package overwhelmingly benefit wealthy people like me while doing almost nothing for the people who truly struggle to save for retirement. This bill does not make it easier for workers to save for retirement, it just makes it easier for high-income earners to shelter more of their earnings from taxes.
This law will make my heirs hundreds of thousands of dollars wealthier. It will do virtually nothing for the worker who toasted my bagel this morning. This may be good for the children of some rich people, but in the long run, the increased inequality it creates is bad for everyone, including my own family.
This legislation is not what America needs to help workers save for retirement. Congress should scrap SECURE 2.0 and start from scratch with something that would help all Americans, not just the rich, save for a comfortable, well-deserved retirement. A multi-billion dollar tax cut for the rich should not be the last act of a Democratic Congress.”
I am trying to set up an interview with Morris Pearl, whom I have interviewed several times before. He said the law benefits him the most and likely provides no benefits for those who should have it the most. Here is a segment of his post.
Back in the 1990s, I was making good money working for an investment bank, and I was putting the maximum amount allowed into my individual retirement account (IRA) and a 401(k) plan (that was later merged into my IRA).
So part of my retirement savings are now in these tax advantaged plans. The tax advantage is that I never paid any income taxes on all of that money I earned, so as I deposited money into these plans, the decrease in my take-home pay was far less than what I put into the plans.
Let’s say hypothetically that I am 62 years old, and I have $2 million in my IRA.
If I get a 6% annual return, I will have about $3.2 million when I am 71 years old.
Using the current IRS minimum distribution tables, assuming I live to be 84 I will have withdrawn around $2.5 million (and paid regular income taxes on all of those withdrawals), leaving my heirs with about $3.6 million. I will have to start withdrawing no matter what at age 72.
If the law is changed like it appears it’s about to be in the upcoming omnibus spending package, I would be allowed to not withdraw anything for three more years, until I am 75. I have enough money to get by without tapping into those savings, so I can take advantage of this change to keep my money in my account and have three more years of investment returns. This would leave my heirs with $4 million – $400 thousand dollars more – without lifting a finger, just because of this new law.
We can do better. We should do better. We must do better. But to do so, we must be informed. And a media that should be working to keep us enlightened are doing in the aggregate, the opposite.