Quote:
Originally posted by Mmmm, Burger (C.J.)
On (a) starve the beast
On (b) so? They're paying the taxes now, in full. In exchange, it won't be taxed upon withdrawal. So, what you're doing is taxing consumption and not savings. (and, mathematically, it's identical to allowing a deduction now and taxing later, on withdrawal).
|
On (a), do you really think this works? Or are you setting out their rationale? Because they aren't starving the beast -- they are maximizing crop yields now at the expense of crop yields later. Or some metaphor like that.
On (b), how is it mathematically the same? The earnings never get taxed. Oh, wait, I guess if we were *saving* and *investing* the current tax revenues, then in theory the returns would be the same as the returns on the money in the Roth IRA.
I think that ignoring temporal issues in this context is unwise. It seems to me this is all about timing, and that the purely formulaic mathematical economic stuff is just being used to cloud the underlying timing issues.
It does sound nice, though.
I think *when* money comes in is not irrelevant.
