And how exactly is it that you think having the fair tax hit your 401k is better than an income tax? You’ll be paying tax either way... meanwhile your Roth is getting double hit.
I’d suggest thinking about this again.
Anyway, many of us have other savings. The immediate hit that a fair tax would effectively make to my savings through instant hyperinflation (via devaluation of that saved, already taxed money) would be equal to about what I pay in income taxes in 2 years.
I will never support the fair tax until that problem is fixed.
And I think the general idea of the fair tax is a good idea.
My 401k money is going to be hit with a 28% tax at the margin, but the FairTax is only 18% at the margin after you figure a 9% reduction in retail prices.
At an EFFECTIVE tax rate, my 401k is going to be hit by 16% under the income tax and about 9% under the FairTax. That takes into account the Income Tax Deductions and Exemptions compared to the FairTax Prebate and non-Taxable expenses like mortgage interest.
Meanwhile, my after-tax accounts will grow at 12% each year under the FairTax where under the Income Tax they would only grow at 10% as the Income Tax sucks away 2% of my 12% gains each year.