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I am 65 years old, just retired and have $500k in my Roth IRA. I have paid taxes, say $125k, on this already.

OK.

I will now pay another $125k in taxes as I spend this money for a total of $250k.

It seems you're thinking that if we stayed with the income tax, then the 125k in income taxes you paid on the money in the Roth is all the tax you'd be paying? That's not right.

When you buy something, anything under our income tax system, the price includes 20%-25% federal tax costs. So when you go buy something today and look at the receipt, 22.5% (or so) of the price is actually federal tax costs. You didn't know that?

The NRST strips those (invisible) federal tax costs out. Then it replaces them with a visible tax of very nearly the same amount - and the amount will be printed on your receipt.

If you buy a $100 widget today, you pay $77 for the widget and $23 in hidden fed tax costs- but you don't see it on the receipt. THe NRST eliminates the hidden $23 in tax. So the price becomes $77. Then when you buy the widget for retail consumption, the $23 is added and you pay $100 at the counter.

So whether you spend the Roth savings now or you spend it under an NRST, you pay the same tax.

Another guy starts saving in his Roth IRA today.

Under an NRST, all savings are "Roth" style - the earnings grow tax free. However, when the money is spent, it will be taxed - JUST LIKE IT IS TODAY UNDER THE INCOME TAX. But some people are unaware of the federal tax costs in prices and erroneously think that the only tax they pay is income tax!

I paid $125k more in taxes than the other guy on the same amount of money.

No, you paid the same amount in taxes as the other guy.

A fundamental concept to understand is that you're already paying federal tax costs at the counter - the nrst doesn't change that. The nrst eliminates taxation on earnings though.

I urge you to spend a few minutes kicking around here.

A fundamental concept to understand is that you're already paying federal tax costs at the counter - the nrst doesn't change that. The nrst eliminates taxation on earnings though.

You know, that's a good perspective to approach the NRST concept from. Educate a person to the taxes they pay at the counter. Make sure they understand how it is embedded into the price. Once they grasp that, explain that all other taxes are eliminated.

Then go on to explain other facets like the FCA demogrant, getting entire paycheck, eliminating the IRS, etc.

Obviously with a person that hasn't already shown an interest in taxes there needs to be an attention grabing headline or opening. For example, "How much better would life be if no taxes were taken out of your paycheck so you received the full amount -- the gross rather than the net pay you get now?"

If you buy a $100 widget today, you pay $77 for the widget and $23 in hidden fed tax costs- but you don't see it on the receipt.

This just isn't true. The 22% "embedded federal tax" is a myth. You are misrepresenting the study you are quoting (besides that study being flawed).

Twenty-two percent of everything sold in the U.S. plus exports would mean the "hidden fed tax costs" would be $2.31 trillion! The total taxes paid by businesses in 2003 was $488.25 billion, and most of that was payroll taxes which virtually every economist agrees is really paid by labor through lower wages. That leaves a minimum of $1.8 trillion for business tax compliance costs! Most reasonable economists put the number around $100 billion. Let's double that to $200 billion to be fair, that leaves $1.6 trillion.

The numbers don't add up.

The vast majority of economists believe that the incidence of corporate taxes are born by investors in the form of lower returns and labor in the form of lower wages, not consumers paying higher prices.