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Pastimes : Ask Mohan about the Market

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To: eddie r gammon who wrote (13386)	1/24/1998 2:11:00 PM
From: Zeev Hed	Read Replies (2) of 18056

Eddie, there are a lot of limitations on these Roth roll over. I know that I for one will not be able to benefit from it. I estimate that about 5 million accounts will be converted but since these are from people with an AGI of 100,000 or less, the average size of the IRA converted will be closer to $50,000 or $12,500 additional taxable "income" for the revenuer to put his hand on. The average tax rate will probably around 20% so we are talking about $25 billion injection to the treasury. On the other hand, however, there are tax credits going to parents of college bound kids which could easily eat half of this, so the total impact would be about $12.5 billion. This is not large enough to cause a major decline in debt or a big surplus in our budget. We might, however have the first surplus in amny years. I hope they do not get greedy and try to grow the surplus much above $100 billion per year, that sure is going to soak too much money from the economy and sink us into a recession. Zeev

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