This question has multiple short and longer term tax affects, it will alter the resources available for investment, and ultimately, may affect how much you end up with.
With the ROTH, you pay the tax on your contribution today, so making a $7,000 Roth contribution will actually cost you the $7,000, plus the tax of $1,400 (15% fed, 5%state) for a total cost to contribute $7,000 to your ROTH IRA of $8,400.
The Traditional IRA is a pre-tax contribution, so you are able to deduct the $7,000 from your income taxes, saving you $1400 in tax for a net cost of only $5,600.
The actual out of pocket difference between the Roth and the Tradition is about $2,800.
Some would debate the money contributed to the ROTH will grow exponentially and never be taxed, so that’s the best way to go. For example if at age 40, you contribute $1,000 to your ROTH, it could be 3 or 4 times that when you retire and you could pull it out tax free.
Let’s consider if you put that same $1,000 into an IRA and invested it the same way. Again, the $1,000 would increase 3 or 4 times before it’s withdrawal, but when you do pull the distribution would be taxable, or would it? Many Americans will be able to pull $20,000 – $30,000 or more every year from their IRAs and never pay tax due to the standard deduction increase. For example, a married couple age 66 can have income of $30,700 before the pay any tax. The question is, how much do you need to save today, so that you can pull out $30,700 per year, ever year, you are retired?
Only you can say how much you will spend per year in retirement as everyones situation is different. All I ask is you consider what could be done with an additional $2800 a year that you save by investing in the traditional IRA vs a Roth IRA.