Hazarding a guess, I would expect only a tiny percentage of Americans remember the Taxpayer Relief Act of 1997 (TRA), a tax-friendly package we were handed under then-President Bill Clinton. In fact, throughout decades as a Certified Financial Planner® and talk radio host, I have suggested that most members of Congress (and likely Clinton himself) didn’t bother to read the details, or they would not have voted it into law. It’s that good. For us.

Two main TRA provisions have captured my attention; a capital gains tax exclusion on sale of primary residences (up to $250k per person and $500k for married couples filing jointly), and creation of the Roth IRA. Though modified over the years, the fundamentals of TRA remain largely intact. A year after inception of the Roth IRA, taxpayers acquired limited ability to perform Roth IRA Conversions from Traditional IRAs.

Controversy has surrounded Roth IRAs and Roth Conversions ever since 1997. Most original analyses concluded that under a stable tax system, there was no real difference in outcome, meaning that after-tax retirement income from the IRA would be equal. We understand the folly of assuming a stable future tax rate, so we must be realistic when considering Roth Conversion options.

Fervent Roth Conversion proponents presume that future income tax rates will have to be higher, as the burgeoning National Debt must be serviced. Meanwhile, I have spent 2+ decades arguing against that assumption. Not because it was illogical (it wasn’t), but because for decades I paid attention to every tax proposal in Congress having chance of becoming law. In Washington, D.C., there has been much more interest in lowering individual tax rates, while offering fewer tax deductions. This flew in the face of the “common wisdom.”

So far, I have been proven correct.

Last week, a new taxing concept was introduced by President Trump. He has shown a remarkable ability to shepherd concepts through Congress, so it bears consideration. His proposal is based on his own controversial tariff system, which is currently awaiting Supreme Court legal affirmation.

President Trump’s plan is to phase out income taxes altogether, replacing government revenue through tariff income. This was our system from the nation’s founding up to 1913, when a very small income tax was passed. Times change.

Suppose for a moment that President Trump’s proposal gets implemented, and income taxes began to get phased out. Converted Roth IRA funds would have been penalized by taxing them in the year of the conversion. I see no potential for claw back of our tax payments, so Roth Conversion taxes paid would be gone forever.

New and changing concepts add to already complex financial concepts.