GOP/TAXES/TRUMP AS PRESIDENT: “President Donald Trump vowed on Monday [10-23-17] to protect a popular retirement savings program, pledging to leave it untouched in the forthcoming Republican tax overhaul plan…
Mr. Trump’s comments point to a challenge Republicans face as they race to write and pass a tax plan: They have ambitious targets for rate cuts and a self-imposed $1.5 trillion limit on the size of the tax cut over the decade.
Those guidelines press them to look for large tax breaks they can limit or repeal and to seek budgetary maneuvers that shift the timing of tax revenue into the period measured by congressional scorekeepers. The proposal to cap 401(k) contributions at as little as $2,400 a year and push additional savings into so-called Roth-style accounts where posttax dollars go in and money comes out tax-free in retirement was a combination of both. Much of the revenue it generated would have come from accelerating tax collections from the future into the near term.
But even a few days of chatter showed the concept’s unpopularity, especially at the $2,400 level. By foreclosing changes to 401(k) plans, Mr. Trump again positioned himself in favor of a broadly enjoyed tax break and the ‘middle class.’ Other parts of the tax plan that he and congressional Republicans support would deliver significant benefits to households at the top of the income scale. Exact calculations of the plan’s impact won’t be possible until Republicans release a more specific proposal.”
-Richard Rubin and Peter Nicholas, “Trump Says ‘No Change’ to 401(k) Plans Under Forthcoming Tax Proposal,” The Wall Street Journal online, Oct. 23, 2017 10:32am