Suppose after the election, in 2025 this gets proposed, and passes. Do you think it would go in effect for the 2025 tax year, or would it go in effect in 2026? Does it happen very often that the pass a major tax law change and have it go in effect in the current year? I don't know the answer, but I doubt it. That would give us the rest of the year to withdraw our full Roth accounts, tax free. It would suck to lose the future tax free growth, but I'm counting on my past Roth tax free growth to remain tax free.They could start taxing the gains in Roth accounts when money is withdrawn, no double taxation.
Suppose after the election, in 2025 this gets proposed, and passes. Do you think it would go in effect for the 2025 tax year, or would it go in effect in 2026? Does it happen very often that the pass a major tax law change and have it go in effect in the current year? I don't know the answer, but I doubt it. That would give us the rest of the year to withdraw our full Roth accounts, tax free. It would suck to lose the future tax free growth, but I'm counting on my past Roth tax free growth to remain tax free.
Not true if the income tax is eliminated and replaced by a consumption tax... in that case both would grow tax free.Agree, but only one can grow tax free.
While there have been some instances of tax changes enacted retroactively, it is rare. I don't think there is any way that the will impose a tax on Roth withdrawals. For one thing, it wouldn't raise a lot of money compared to just increasing the tax rates by inaction.Suppose after the election, in 2025 this gets proposed, and passes. Do you think it would go in effect for the 2025 tax year, or would it go in effect in 2026? Does it happen very often that the pass a major tax law change and have it go in effect in the current year? I don't know the answer, but I doubt it. That would give us the rest of the year to withdraw our full Roth accounts, tax free. It would suck to lose the future tax free growth, but I'm counting on my past Roth tax free growth to remain tax free.
I agree, BUT, I would not rule out the possibility of a consumption tax (VAT?) being ADDED to the current tax burden. Likely, NO. Possible? Coupled with a huge deduction for low income people, it could be touted as progressive, and not regressive.Not true if the income tax is eliminated and replaced by a consumption tax... in that case both would grow tax free.
That said, I don't think there is even a remote chance of a consumption tax being implemented in the US as a consumption tax would be so regressive compared to the current income tax scheme I think even the rich whould would benefit from a consumption tax replacing the income tax would object to it.
I agree, BUT, I would not rule out the possibility of a consumption tax (VAT?) being ADDED to the current tax burden. Likely, NO. Possible? Coupled with a huge deduction for low income people, it could be touted as progressive, and not regressive.
I don't think either will happen, but if I had to bet on one, it would be the latter.
JMHO