ETFs rarely throw off any income or gains. For a person in a high tax bracket who is committed to buy and hold, is there any reason to consider mutual fund over ETFs in a taxable account? An ETF can be held for twenty years or more while generating only negligible taxable income or gains. The same cannot be said for mutual funds and who can forget getting hit with big gains in a year like 2008 when the mutuals had to realize gains because of the run for the exits by shareholders!
I may be missing something which is why I'm asking the question. There are now fundamental index ETFs, "active" ETFs, low-vol etc. Assuming that Bogle is even close to right, 90% of mutual funds will probably be beaten by lower fee ETFs anyway over the long haul, so again I wonder, why would someone in a high bracket still consider a mutual fund over an ETF assuming you intend to hold for decades?
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High tax bracket or not the overriding issue IMHO would be the fees attached to one's positions. Remembering to compare apples to apples i.e. index mutual funds to index ETF's, active vs. passive management, purchase or trading costs and so on, it seems wiser to me to use ETF's for the long haul over mutual funds. Granted there are some active managers who seem to add alpha on a near consistent basis but you never know how long that will persist, nor how long they will stay with the fund(s) you choose to hold.
Bottom line, given your assumptions I'd tend to agree with your premise. However, I never fully commit to letting the tax tail wag the dog. Once one has an investing plan in place performance is what it's all about (with all due respect to the hokey-pokey). Good luck.
They do 'throw off' (distribute) dividends, for example if it is a stock ETF, such as VTI, VOO, IVV, etc. They have to distribute the dividends. But they only rarely have capital gains to distribute. But also, an index mutual fund, such as VTSAX, also will only very rarely have capital gains to distribute.
So much of what you discuss is really the difference between an actively managed mutual fund and a passive index ETF. It just so happens that the vast majority of ETFs are indexed, and the majority of mutual funds are active.
So index funds, whether traditional index funds such as VTSAX, or an ETF index fund, such as IVV or SCHB, are extremely tax efficient, distributing dividends but only very rarely capital gains.
The terminology is a bit confusing, because really, ETFs are mutual funds. They are just exchange traded mutual funds. So there are actively managed funds, both traditional actively managed mutual funds such as DODGX, and also actively managed ETFs, such as BOND (the Pimco Total Return ETF, an actively managed bond fund). And there are passive index funds, both the traditional index funds such as VFINX, and the passive index ETFs, such as SPY.
Vanguard has a unique situation, in that they have ETFs that are just a different share class of their traditional index funds. For example, VTI is just a different share class of VTSAX.
For the purposes you described, you would be well served with index ETFs, such as VTI, and you are correct, it would be unusual and rare for it to have capital gains distributions. But do expect quarterly dividends to be distributed. And I think you will also be quite impressed with the lack of capital gains distributions on traditional index mutual funds such as the Vanguard ones mentioned above. You can check this out at the Vanguard website.