<prompt> Human: How are Roth IRAs exampt from income tax? Are your capital gains that are earned with investments with the Roth IRA not taxed?If thats the case, why doesnt everyone have a Roth IRA? From what I understand you, only pay taxes on the earnings of the IRA if you take it out too early and become subject to penalties. If you take it out early, youd be subject to taxes on the earnings just as you would on a regular investment.Note: I think taxes will be higher in the future, therefore a regular IRA isnt that attractive to me. Id rather pay taxes now before the wave!  <response>: Are your capital gains that are earned with investments with the Roth IRA not taxed?Yes.If thats the case, why doesnt everyone have a Roth IRA?Some people are betting their tax later will be less than their tax now, so theyd rather delay paying tax.I think taxes will be higher in the future, therefore a regular IRA isnt that attractive to me.Then contributing to a Roth would be a good thing for you. Lock in your tax now. No required distributions for you later. 