Yeah really if something is openely called a “back door” then we all shouldn’t be too surprised if its removed.
“backdoor”, “exploit” or “loophole” etc… not stuff we should be surprised to see go.
I sympathize there but I don’t think this requirement will be lifted soon due to the added cost (in lost tax revenues). Lifting the earned income requirement would allow parents to contribute to kids Roth IRA accounts (just need the kids to have interest income of $6+k) in custodial accounts, and retirees (including FIRE folks) would be able to continue contributing to them as well. I think that would not be the intended use for these accounts.
In the long run, the conversions have to be a net loss in tax revenues. When people take advantage of these optional conversions, it’s rarely to benefit the IRS… But you’re right that considering how DC operates lately with kicking the can on tough decisions until it’s someone else’s problem, it’s a bit surprising which is why I’m wondering if it’s only a small amount of money involved overall.
I question the intended use if you are allowed to save for old age but I am not. My savings has the same purpose as yours, there’s no justifiable reason for yours to be tax advantaged and mine not.
It’s the same “justifiable reason” as having your top dollar taxed at 35% while my top dollar at 20% (for example). Make more – pay more.
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But who’s saying it’s “more”? You can make multiples more than me, yet still yield the benefit that I remain shut out of simply because of how you earned it. In this case, it’s “make more - pay less”.
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I’m sorry, I thought you wanted to remove the income limit, but you said “the earned income requirement”.
AFAIK, all these accounts (IRA, 401k) were created for employee retirement, thus require earned income. The government (the people) does not like to support couch potatoes who figured out how to get money without working 
.
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Most people are couch potatoes when they receive the money from their IRA account… 
I’m just guessing at the intended use. Take the income limits for who can contribute and get the most favorable tax treatment. It’s targeted towards lower incomes both for Traditional and Roth IRAs. So it is deliberately setup to prevent the highest paid workers from benefiting from tax advantages, thus adding a progressive feature to these accounts.
Second, stuff in bills does not get added for no reason. Why did they restrict it to earned income? So that employees and those running a small business or farm only can take advantage of the tax advantages of the account. Clearly they did not want passive income to be as tax advantaged. If you’re living on the revenues of your savings only without having to work, the law decided that you were better off than most who have to work for a living so you did not need the freebie.
I agree that it sucks for people with only passive income like from rentals or investment returns. However, I can see why it was setup this way to stack the odds a bit more in favor of lower income workers. It was also a relatively simple setup to require earned income to prevent people already retired to keep getting tax advantages or kids being given silver spoons. But they could extend it to people with other income streams as long as they were still under the income level limits. I just think there is no political will to get it done at this point though.
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Uh, I think it’s “Make more - pay a higher percentage”. “Make more - pay more” is too sensible.
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