abolishing income tax

[LetsGoHawks83]

Obviously, it would be nice to not have income tax, but it's the simplest way to tax "fairly".

Now.... Property tax is something that pisses me off. I worked my a$$ of to earn money (taxed earnings) to buy and pay a loan on my property.

Then my reward for this.... I get to pay taxes just for having this home/property.... FOREVER.

I know a lot of school funding comes from property taxes, but it would be nice if there was a way to shift this to income taxes, even if you have to increase taxes there slightly.

Wouldn't it encourage home ownership, if you were not taxed or very little tax on your primary residence? Keep commercial property tax and tax the sh*t out of second homes, so maybe you discourage the buying of houses to rent for the purpose air-bnb.

It goes without saying, we need better stewards of our tax money. WAY too much waste and it's too easy to waste when you can just go back for more.

 

[LetsGoHawks83]

Best thing about a Roth is if you plan on retiring early and getting health insurance via the ACA, your withdrawals from Roth don’t count as income.

Outside that you could make an argument that it’s a wash. Tax rate on 401k withdrawals in your retirement might be lower than when you were working.

High deductible health plans and putting money in a health savings account is a great move, if you can swing it with your employer. Invest HSAs in funds just like anything else and it's all tax free, if spent on health needs.

Plus your monthly insurance premium is much lower.

I just wish our employer had it as an option the first 10 years of my employment, when I didn't have kids and the more frequent doctors visits! LOL

 

[Tenacious E]

Best thing about a Roth is if you plan on retiring early and getting health insurance via the ACA, your withdrawals from Roth don’t count as income.

Outside that you could make an argument that it’s a wash. Tax rate on 401k withdrawals in your retirement might be lower than when you were working.

I had not thought of that...

 

[Hoosierhawkeye]

Sounds like gov’t working together on a project…in this case ACA. So, Trump didn’t dismantle ACA then…correct? Now tell me you weren’t dumb enough to know why another poster said you were “splitting hairs” on this topic.

His inability to dismantle the ACA wasn't for lack of trying it was for lack of competence.

 

[onlyTheObvious]

High deductible health plans and putting money in a health savings account is a great move, if you can swing it with your employer. Invest HSAs in funds just like anything else and it's all tax free, if spent on health needs.

Plus your monthly insurance premium is much lower.

I just wish our employer had it as an option the first 10 years of my employment, when I didn't have kids and the more frequent doctors visits! LOL

Yes. I have HSA but my insurance is a $6000 deductible. It’s pretty difficult to get very far head if you use healthcare at all.

 

[Tenacious E]

Now.... Property tax is something that pisses me off. I worked my a$$ of to earn money (taxed earnings) to buy and pay a loan on my property.

Then my reward for this.... I get to pay taxes just for having this home/property.... FOREVER.

I know a lot of school funding comes from property taxes, but it would be nice if there was a way to shift this to income taxes, even if you have to increase taxes there slightly.

I guess my response would be (and this is not meant to be assholey) is if things like schools and city infrastructure (building and maintaining) are not something you want to pay for, buy outside of city limits in the nearby countryside and pay only county taxes.

 

[onlyTheObvious]

I had not thought of that...

I plan on joining the very large group of paper millionaires that retire early and make themselves look somewhat poor to get very cheap health insurance.

 

[cheeselog8]

After looking at this further, I think the main advantages to a backdoor Roth over letting it ride in a traditional 401k is that in the Roth there are no RMDs, and you could convert incrementally to not have a massive taxable event all in one year. Otherwise if you convert $1M+ all at once, you better have the wherewithal to cut a check for hundreds of thousands of dollars, as you cannot pay the tax bill out of the retirement account without incurring the 10% penalty. Other than that, the downside is that you have to wait 5 years to withdraw funds, if you are already nearing or at retirement.

Backdoor roth is different than a Roth conversion. The funds you use to do a backdoor Roth are not already in a 401k. They are after tax dollars that you are able to get into a Roth even though you are over the income limits. So your options for this money if you want to invest is to either backdoor Roth it or park it in a brokerage account. The Roth has tax free growth while the brokerage is subject to tax, making the Roth much more desirable.

 

[SnootHawk]

There are so many people who are fully against giving the government any money . . . yet at the same time willing to take stimulus, child tax credit EIC ect. The mental hurdles needed to get from one stance to another is mind boggling. Other than individuals only want to take, not pay their fair share anymore.

Exactly. They are the ones that bitch about the roads, etc. but take advantage of the government-provided economic infrastructure to make money. But somehow all that stuff is supposed to appear out of nowhere.

 

[joelbc1]

High deductible health plans and putting money in a health savings account is a great move, if you can swing it with your employer. Invest HSAs in funds just like anything else and it's all tax free, if spent on health needs.

Plus your monthly insurance premium is much lower.

I just wish our employer had it as an option the first 10 years of my employment, when I didn't have kids and the more frequent doctors visits! LOL

HSAs were just coming about the time I was retiring…it seems to be the best way to get bang for your healthcare insurance dollar… but there are a lot if folks who honestly would gave a very difficult time affording this. Too many folks are just too poorly disciplined to responsibly handle the $$. What is in place now is not very efficient cities but it does offer accessibility to healthcare…. Which is very profitable for insures and providers.