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,i>A payroll tax is one of the worst ways to fund health care in the general case, because it punishes work over choosing not to work. It pains me to say that as someone who hopes to FIRE within 10 years, but there's no way the taxpayers should be giving me a free ride if I have the financial goof fortunate to be able to do so. Heck, if the taxpayers gave me a free ride I could probably FIRE in 5 years, not 10.


So what's different from now? The tax laws already favor not working vs. working. I'm retired. One advantage I have over you is that I have complete control over my income, and substantial control over my taxes as a result. It won't matter until I'm about 71 (when I'm subject to the minimum required distribution rule ) what goes into the IRA as income/capital gains. I won't be taxed on anything that isn't withdrawn. I do have a taxable account, but the only thing in it is 1300 shares of AAPL. I don't plan to sell that for a while. AAPL pays no dividend, so there's not even the 15% tax on dividends. Furthermore, even when I sell AAPL, because I've kept (and intend to keep) my marginal tax rate at 15%, I'll only have to pay 10% of the gain to the Feds.

Unearned income is treated differently than earned income. Even if you and I had identical realized incomes and identical deductions, I'd still pay lower Federal taxes than you do because unearned income is not subject to SS and Medicare taxes nor is it subject to the state disability tax. Unfair as that may be, that's the situation now.

Maybe sometime in the future unearned income will be subject to the taxes mentioned above. If so, it's probably going to be a while before that happens. In any case, you will be getting a "free" ride in 10 years if nothing changes.

Again, it's my intention to keep my marginal tax rate at 15% The last time I looked at Federal tax tables, my wife and I could have an AGI of up to $81k before moving into the next bracket. That gives us lots of wiggle room, especially since we have no debt. Debt service requires additional taxable income. It's never made sense to me to pay $1.00 in interest to save cents in taxes.

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