Yesterday, Howard explained why the Roth rollover loophole, set to open in 2010, is horrible policy. By pre-paying tax on accumulated IRAs, rich folks can effectively increase their tax-free savings by close to half. (My 2006 article explains this point.) And the rollover option is worth most to people who don’t actually need retirement accounts to finance their old age.

It is interesting, and perhaps worth noting, that while political opposition seems to be hardening against the $1 trillion, ten-year cost of the early versions of health reform, barely a peep of concern has been raised about the $3 trillion price tag for President Obama’s plan to extend most of the Bush-era tax cuts.

Fall must be right around the corner. TV is filled with back to school ads and states have begun their annual sales tax holidays. These tax respites may have made sense when states were flush. They gave consumers a modest cost break at relatively little expense to government. But today, when state and local treasuries are bare, do governors still want to exempt some sales from tax, even temporarily? These days, consumers are faced with an explicit trade-off, even if politicians won’t admit it: Save a couple of bucks at the checkout counter in return for more cuts in government services or higher other taxes.