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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76384  
Subject: Re: Roth IRA's (cont.) Date: 2/1/1998 11:33 AM
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Kilmarnoch,

Comes the dawn. XtraFool was speaking of effective rates and I was thinking of marginal rates. There is indeed a big difference between the two. The first is based on someone's total tax bill, and the latter is based on the cost of every incremental dollar. Don't take that incremental dollar, and the effective rate declines.

<<Tax rates are going to go up not down.

When congress realises throwing away 20% of each year's tax revenues to pay interest on the debt is stupid and if Social Security hasn't been canceled in 20 years, people are going to be *dreaming* of the "good old days" when the normal bracket was only 28%. Think about what tax rates would pay off the national debt in a 30 year period *OR* fund SS in 2020... in the future I expect the "average tax bracket" to be in the low 40% range.>>

Agreed, but I fear it will come in the form of a flat tax or, worse, some kind of national value added tax or a combination of the two. If that does occur (and I fervently hope it won't), everyone's plans may go down in flames

<<ps. is there a message folder that talks about long term "stability" of the federal budget? *=) >>

Not within TMF.

Regards.....Pixy
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