A. We can give them a tax deduction each year to invest money for their old age.
B. Why would that get more money out of them?
A. We'll tell them they can defer paying any income tax on the profits until age 70.
B. But then we can't get their money.
A. Sure we can. We'll borrow against it. We'll use their future tax payments as collateral.
B. You mean the old "full faith & credit of the United States" routine?
A. You've got it.
B. Then what?
A. We'll raise the tax rates later. We'll tell them it's necessary for debt reduction.
B. But we never reduce the debt.
A. Of course not. But the suckers always go for it. They'll pay more taxes "just this once."
B. So we can borrow even more.
A. Right.
B. But they may start hiding their profits. Money will get hard to collect.
A. That's the beauty of giving a tax deduction now. We will tell them they have to report whatever they invest in every year until they cash out.
B. So, they can't hide it.
A. Right.
B. I am beginning to understand this. How about this? We can tell them their money has to go into government-approved investments.