Thank you for
asking. I hope you realize that I can't see the future any better than
anyone else, but I'll give you my views below. Bud
-------------- Original message from
Trish Callis <trishcallis@hotmail.com>:
--------------
I think many readers would be interested in your take on this, especially since
the $100K AGI limit will be lifted in 2010. For example, I believe taxes
are bound to go up in the higher brackets but wonder if there will be much
change to the current 15% bracket.
I doubt if there will be
much change in the 15% bracket, but you will feel the effects of higher state
taxes, and the costs of higher taxes on corporations and high income people
will be reflected in higher prices of the products you buy.
Further, what are the chances of a VAT
being enacted?
It's possible, but not
probable. Almost half of all workers will be paying no income tax, so
there is a large voting block to increase taxes on higher income people, but
100% of the people would be paying the VAT, so it wouldn't be politically
acceptable.
Then Roth IRA distributions would
effectively be taxed again as they are spent.
True, but I don't think
that will happen. It's possible that the
Roth income would be considered in the "phase out of deductions and expemptions" but you have to be a high income person
to be caught in this entanglement.
My husband and I are each 61, retired,
and living off savings. Roughly half is in IRAs and the other half in ordinary CDs and mutual funds (no capital
gains to speak of), so the tax on a ROTH conversion would come from savings.
I'm not concerned about a taxable estate.
If you make the
conversion, it only makes sense if (1) you expect future tax rates to be
higher, and (2) if you can pay the tax due on conversion from non-qualified
accounts.
Thanks for the web site!
Trish Callis (aka Patricia Callis
Nicholson)
Columbus, Ohio
See Jim's garden photos @
http://web.mac.com/nicholsonjim/Start/Ohio_Garden.html