Assume the same facts presented in exercise 9 with the exception that the taxpayer expects her tax rate to decline from the current 28% to 20% when she retires in 40 years. Should the taxpayer convert to a Roth IRA?
Answer to relevant QuestionsMany taxpayers who elected to convert the funds in their traditional deductible IRAs to Roth IRAs in the summer of 1998 converted back to traditional IRAs in September 1998 after the stock market fell (the Dow Jones ...Assume the same facts presented in exercise 5 with the exception that the taxpayer expects his tax rate to be 20% when he retires in 40 years. What should the taxpayer do now? In comparing the deductible IRA with the Roth IRA, we assumed that any excess funds left after investing the maximum pretax dollars in a deductible IRA were invested in an SPDA. How would the comparison change if the excess ...Compare and contrast a policy of a. Excluding dividends from taxation for individual taxpayers. b. Allowing firms a tax deduction for dividends paid. c. A dividend tax imputation system where receive a tax credit for ...Suppose that the tax rate on personal income, tp, is equal to 40%; the corporate tax rate, tc, is equal to 35%; and the capital gains tax rate, tcg, is 20%. Also assume that the before tax rate of return on investment ...
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