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To: upchuck

The real point is that if you took the money out of the Roth and weren't taxed on the withdrawal (some circumstances are taxed with a Roth) and then spent the money under the present system, you'd be paying the "hidden tax" of prices raised solely by the income tax system.

If you kept the Roth and then spent the money under the FairTax system - and spent it on taxable items (not everything is taxed) - you'd pay the FairTax which would probably be about the same as the "hidden tax" when spending under the present system. After all, the government didn't promise to not have "hidden taxes" (which they've had ever since 1909 - the corporate income tax preceeded the individual income tax). Also, under certain circumstances some of the Roth money can be taxed under the income tax so check the law more closely.

It's probably about a tradeoff dollar-wise except that with the FairTax YOU get to choose when and how much you pay in tax and can control that by controlling consumption - which is much less true under the present system. Also, if you retain the funds as an investment, that investment isn't taxed under the FairTax so that it can build up faster.


90 posted on 09/17/2005 7:45:43 AM PDT by pigdog
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To: pigdog
I wrote what I wrote. You can tell me all day long about "embedded taxes," and that some of the Roth funds may be taxable, etc. But at the end of the day, if I have a large Roth IRA (and I know folks who have millions in Roths) and you don't figure out some way to take care of me I'm not gonna support the NRST.

Let me say again, I support the NRST but there needs to be some temporary, expiring accommodations made.

99 posted on 09/17/2005 8:15:08 AM PDT by upchuck ("If our nation be destroyed, it would be from the judiciary." ~ Thomas Jefferson)
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