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You need to rethink your figures that you're using. If one in investing something that can produce 12% rate of return (apparently equities), one is not going to be taxed at their marginal tax rate as all the earning is not taxable . . . nor might it be all ordinary income taxable . .. right?

If you use a mutual fund, you might want to use figures like Vanguard found in their study with was written about in the Wall Street Journal several days ago. They found that in mutual fund taxes shaved from 1.5% to a little over 3 percentage points off the return. So, to account for taxes, you might was to shave 2 points off and use 10% instead of 12% for comparison . .???
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