Sunday, October 22, 2017

Wall Street Furious Over Tax Reform Proposal to Slash 401(k) Contributions

Did I mention tax reform is a shell game con?

The New York Post reports:
Wall Street pushed back hard on Friday against a report that
congressional Republicans are weighing a plan to severely limit the amount of money Americans can contribute to their 401(k)s.

The Capitol Hill lawmakers, searching for ways to pay for President Trump’s broad proposed tax cuts, are eyeing a $2,400 cap on pre-tax contributions to 401(k) plans, used by millions of US workers to save for retirement.

Currently, the pre-tax limit for such contributions is $18,000 a year.

It’s unclear if the caps will survive. The House Ways and Means Committee, which is writing the tax plan, isn’t expected to release the details of the bill until the middle of next month--but many somewhere in the tax system will get stuck with empty shells, one way or another.



  1. This is how long-term changes in policies start. They float an idea, then it gains currency with intellectuals, then it moves into formal legislative or regulatory edicts. It might take several years, but like the frog in slowly boiling water, folks just won't notice.

    State governments already tax the mere holding of assets via property taxes. How long could it be before a desperate federal government floats the idea of taxing retirement savings accounts, like the old joke about why rob banks, "Because that's where the money is." Or perhaps they'll just "borrow" from retirement savings accounts, replacing what's in them with IOUs (Treasury notes). Maybe they'll do it gently, like requiring that all retirement savings accounts hold a certain minimum percentage in Treasury notes, "for the safety of retirees, to protect them from the vagaries of the market."

    We have let loose a warfare/welfare beast that will ultimately consume all that it can to finance its absurd objectives.

    1. The truth of the matter is if you are under 50 now, no matter what you do to save for retirement the chance of taking a hair cut is nearing 100%.

      Nothing short of holding physical assets will mean anything.