Yet again the NYT repeated misinformation about an effort by Congress to hand more money to rich people. Under current law, people must withdraw money from retirement accounts at a set rate after they reach the age of 70. The idea is that this money will be taxed before they die. Wealthy people, who don't need this money to maintain their living standard, would rather leave the money in their account, and never have it taxed before it is passed on to their heirs. In order to increase the money that they can pass on to their heirs, they invented a story about how current rules will create a great injustice given the plunge in the market. The argument goes that retirees will be required to sell their stock at a loss in order to meet the withdrawal requirements. This claim is not true for the overwhelming majority of retirees, and in fact may not be true for a single retiree. The reason is that no one keeps all their money in stock. That means that almost anyone being forced to make a withdrawal by this rule could do it by relying on the portion of their account held in money market market funds or bonds. In short, this is just a lobbyist's invention to reduce the tax burden on the wealthy even further. The media should be exposing this misrepresentation not repeating it.
--Dean Baker
