President Obama will unveil a slew of new taxes targeting the wealthiest Americans in his State of the Union address Tuesday. And there’s one person in particular who would be hit extra hard if the policies ever became law: Mitt Romney.
When Romney ran for president in the last election, his financial disclosures served as a fascinating window into how the rich manage their money very differently from most Americans. Exhibit A: Romney’s individual retirement account (IRA), which was worth somewhere between $20.7 million and $101.6 million when he was running for president.
That number shocked a lot of people, since the government allows savers to put in only several thousand dollars a year into your IRA ($6,500 is the current annual maximum). You’d have to be a trading wizard beyond the likes of Warren Buffett to spin such contribution amounts into millions.
How does anyone amass an IRA worth more than $25 million?
In a fact sheet describing the new proposals, the administration never calls out Romney by name, though it does slyly refer to closing loopholes that have enriched “300 extraordinarily wealthy individuals who have accumulated more than $25 million each in IRAs.”
Romney never revealed how he did it (there are educated guesses we’ll get to in a moment). But the most striking thing about his IRA—aside from the sheer amount—was how much he was saving in taxes..
