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In general, for clients who expect their marginal tax rate in retirement to remain the same as it is currently, a 401(k) or a deductible IRA is equivalent to a Roth IRA. Under prior law, unearned income of children under age 14 was taxed at their parents' marginal tax rate once it exceeded $1,700 for 2006, if the parent could claim the child as a dependent. The revenue could be used for some combination of federal deficit reduction, reducing the marginal tax rate on lower-income workers, and intelligently chosen spending programs, for example, to reduce the security dangers from nuclear proliferation. |
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