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To: Skeptic2
Your protest is quite valid and has been addressed by me and about five other posters numerous times over the years.

If you have assets held outside of tax deferred accounts what do they consist of?

Mutual funds? They probably have long term appreciation which will be taxed when you cash them. Under a NRST you save.

Interest accounts at a bank? The interest will no longer be taxable to you. They'll turn into muni bonds overnight but with a higher rate of interest.

Stocks? Hopefully they are highly appreciated. If so your capital gain liability will disappear. You save.

Corporate bonds? The interest becomes tax free. You save.

Muni's? Since their yields will adjust upward to match corporate bonds you may lose some pricipal value if you sell before maturity. You could lose.

What about your accounts that are in tax deferred vehicles? Do you have any IRA's, SEP's, 401(k)'s, 403(b)'s, etc? All of them will benefit greatly under the law as it is currently written.

So you see that in almost all cases there is some benefit. Now as far as how much that will offset the new tax the question becomes much more complicated. In that instance you have to take into account the pre-bate, your buying habits etc.

774 posted on 10/24/2006 12:12:12 PM PDT by groanup (Limited government is the answer. What's the question?)
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To: groanup

Savings bonds purchased with after (income) tax money. Let's ignore the tax-deferred stuff, as those were already accounted for in my retirement spending plan. Let's just concentrate on the principal I invested in the safest instrument on the planet: US Treasury securities.

As I understand it, for every $1000 of that, I need to adjust my retirement spending plan downward by aprox. 20+% because of the new, "Fair Tax."

I wish someone had told me about this forty years ago, before I started executing my retirement savings plan.


797 posted on 10/24/2006 2:14:39 PM PDT by Skeptic2
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