okay.... look at this way. Say you have 1,000,000 right now. Half of it is pre-tax taxable at 15%. The rest is tax free. Your tax liability right now is 75,000. Suppose Huckabee is elected and implements his tax plan. 23%. You spend all of it 15 years. You will have paid $230,000 in taxes. But you also invested it from day one at 5% apr. You draw 5% (a conservative number) on only what you have left over the next 15 years. Your investment makes you 350,000 tax free dollars, to give to your kids, or do whatever you wanted to with.
Which would you rather have?
okay.... look at this way. Say you have 1,000,000 right now. Half of it is pre-tax taxable at 15%. The rest is tax free. Your tax liability right now is 75,000.Excellent!
Suppose Huckabee is elected and implements his tax plan. 23%. You spend all of it 15 years. You will have paid $230,000 in taxes.
Yes. $75,000<$230,000. Excellent!
But you also invested it from day one at 5% apr. You draw 5% (a conservative number) on only what you have left over the next 15 years.
If I spent it all in 15 years, earning 5% and drawing 5%, your numbers don't add up. Maybe you should run an Excel spreadsheet?
Your investment makes you 350,000 tax free dollars, to give to your kids, or do whatever you wanted to with.
I can leave $350,000 tax free to my kids today.
Which would you rather have?
Numbers that add up.