Should distributions from retirement accounts be taxed at capital gains rates instead of as ordinary income? A retiree named Ted Koch, writing a guest post at Forbes, thinks so:
Basically the middle class and especially retirees have a lot of money tied up in IRA type investments that if they were to cash in on now they would have to pay taxes as if it was ordinary income. This high tax rate keeps them from cashing in now. Pass a law allowing for any withdrawals made in the next few years to be taxed at the capital gains rate or less. This would put the middle class on a more equitable basis with the wealthy investor class. Money would flow into the economy and even some taxes would be paid. Otherwise the money would just sit in these IRA accounts until later. Allowing even younger workers to take similar withdrawals would put money into the system.
What do you think?