3. Suppose that the President and Congress were to pass a law stating that futur shortfalls in the Social Security program would be funded with across-the-board increases in income taxes at the time of the shortfalls (and well after their tenure as elected officials). How would you expect this law to affect the relative attractiveness of traditional IRAS (deduct your investment from your taxable income in the year of investment) versus Roth IRAS (no taxes on withdrawals and interest of investments in IRAS) for a twentyfive-year-old today? Explain.
3. Suppose that the President and Congress were to pass a law stating that futur shortfalls in the Social Security program would be funded with across-the-board increases in income taxes at the time of the shortfalls (and well after their tenure as elected officials). How would you expect this law to affect the relative attractiveness of traditional IRAS (deduct your investment from your taxable income in the year of investment) versus Roth IRAS (no taxes on withdrawals and interest of investments in IRAS) for a twentyfive-year-old today? Explain.
Chapter27: The Federal Gift And Estate Taxes
Section: Chapter Questions
Problem 5DQ
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