Re: OT Dims want to raise taxes, again

http://www.index-funds-trading.com/401k_tax_consequenses.asp

Perhaps I am not good at making my point. Read paragraph 4:

"
The employee ultimately pays taxes on the money as he or she withdraws the
funds, generally during retirement. The character of any gains (including
tax favored capital gains) are transformed into "ordinary income" at the
time the money is withdrawn. Many people assume that a 401(k)'s main
advantage is due to the employee being in a lower tax bracket in retirement
than during working years, but this assumption is not always realistic or
guaranteed to be correct, because the current capital gain rate is 15% while
the marginal income tax rate on ordinary income may be as high as 35%. Given
the long-term budget outlook and its inherent uncertainty, the ordinary
income tax rate could once again rise to 35% or higher.

"





"JoeSpareBedroom" <dishborealis@xxxxxxxxx> wrote in message
news:bBjbi.10149$B25.6489@xxxxxxxxxxxxxxxx
"Art" <begunaNOSPAMPLEASE@xxxxxxxxxxxxxx> wrote in message
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Mike you once again don't know what is going on.

I will sum it up for you:

The middle class is using 401K's to invest their money but that means
that although they get to invest tax free, they do not get the benefit of
the new low tax rates on dividends and long term capital gains because
when they take their money out at retirement they will be paying income
tax rates, not the lower capital gains and dividend rates. So while
401K's still allow you to invest initially tax free, you end up paying
higher rates at the end. I am not saying a 401K is a bad choice but I am
saying that it is no longer a no-brainer, especially if your employer
does not offer matching contributions.


You can't hide from the math. What you're saying is absurd.



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