Hmmm....would like to see that illustration as I think I am missing your point. Uncle Sugar gets paid one way or the other. If your effective tax rate is the same when you make the contribution as it is when you take the distribution, it doesn't matter which you contribute to (deductible or Roth), your tax bite will be the same. If your effective tax rate is higher when you retire, you'll pay less in total tax if you contribute to a Roth. If your effective tax rate is lower when you retire (true for most people), you're better off taking the deduction now.

My point a few posts above was that everyone just LOVES the Roth, and happily will contribute to one without even considering the tax implications of doing so. The whole point of contributing to a 401K/IRA/403b/whatever is legal tax avoidance. We want to pay Uncle Sugar as little as possible.

A low income individual should bias towards a Roth to minimize the payment of taxes over his/her lifetime. Higher income individuals should be biasing toward taking the deduction now by contributing to a deductible 401K (for example) while their effective tax rate is likely higher, rather than contributing to a Roth now and paying that higher effective tax rate when they could have paid less tax in the future when they're likely making less money during retirement.

If you're in the prediction business and think that taxes are going to be significantly higher in the future, then sure, do the Roth. To me, if I'm a high earner now and since I think it's impossible to predict the future, I'll take the sure thing deduction now while I'm definitely paying a lot in taxes. Sure, that current high earner will likely be a high earner during retirement, too, but most likely not nearly as high as he/she is now.

The point is......don't blindly contribute to a Roth just because it's all the rage and that's what all your friends are doing.