Saturday, April 05, 2008

Obama and Clinton Not Using IRAs

There's been such an interest in the candidates releasing their tax returns. Economics professor Greg Mankiw points out what's not there, Clinton: Also no fan of retirement saving.

"I believe each of them [Obama and Clinton] could have put $44,000 into a SEP-IRA, but apparently, contrary to what many financial advisers would recommend, they chose not to. Why? I suggested two hypotheses for Senator Obama: bad tax advice or the expectation of much higher future tax rates. For the Clintons, a third hypothesis is possible: Given their substantial income ($16 million in 2006), the chance of sheltering $88,000 may be too trivial to bother with."

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