I am trying to do a secnario analysis on conversion of Roth IRA/IRA. Is there a good assumption on what the future tax rates will be going forward? On the Long Range Plan from CBO, it states that tax rates will increase .6% annually thru 2019. I am wondering if I change the assumptions to this, how are the income tax rates already adjusted by ESPPlanner.
Michael
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RSS
We actually don't adjust the tax rates. We do adjust the tax brackets according to inflation. The brackets start to change 4 years after the last time they changed officially at both the federal and state level. Overall we assume that even state without explicit indexing have to re-index or they start to drive folks/business out of state because of high taxation due to bracket creep.
Best,
Dick Munroe