No, in your hypothetical case, the Roth IRA tax shelter produces less taxes yet a smaller real retirement annuity. The reason is the timing of the taxes. The timing issue does not affect the stream of tax revenues to the IRS because at any point in time, taxpayers are distributed over all ages. In this case, the IRS can replace all Roth IRAs with traditional IRAs and lower the tax rates. The IRS will collect similar revenue each year, and retirees will enjoy higher real retirement a nnuities.

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