Assume that you invest F = $20,000 (your financial capital) in a

“tax-sheltered” mutual fund that earns v = 8% (effective) per year where you do not have to pay any income taxes until you withdraw the money from the investment account in N = 15 years. It is only when you withdraw the funds (after fifteen years) that you must pay income tax on all your investment gains at the “ordinary income”

rate of TAXoi = 46%. Are you better off (i.e., have more money after fifteen years) under a “continuously taxable” structure in which you must pay capital gains taxes at the (lower) rate of TAXcg = 23% every single year?