What You Need to Know
- IRAs were designed to provide retirement security to middle-class families, not allow the super wealthy to avoid taxes, Sen. Wyden said.
- The number of IRAs with $5 million to $10 million tripled from 2011 to 2019.
- Spurred by reports of Peter Thiel's $5 billion Roth IRA, lawmakers have been considering limits on large account balances.
New data released by the Joint Committee on Taxation shows “it’s long past time to crack down on mega-IRAs,” Senate Finance Committee Chair Ron Wyden, D-Ore., said Wednesday.
The GAO report, which used 2011 tax data, showed nearly 8,000 taxpayers had aggregate IRA balances of $5 million to $10 million. A total of more than 9,000 taxpayers had $5 million or more.
“The new JCT data show a threefold increase in aggregate IRA balances of $5 million or more,” the lawmakers said.
As of the 2019 tax year, nearly 25,000 taxpayers had aggregate IRA balances of $5 million to $10 million. In total, more than 28,600 taxpayers had more than $5 million, including 497 taxpayers with aggregate IRA balances of $25 million or more, the JCT found. The average aggregate account balance for these 497 taxpayers was more than $150 million.
“It is shocking, but not surprising, to see how the use of mega-IRA accounts by mega-millionaires and billionaires has exploded,” Wyden said Wednesday during a hearing. “IRAs were designed to provide retirement security to middle-class families, not allow the super wealthy to avoid paying taxes. This is the perfect example of what I’ve long called the tale of two tax codes.”