The Tax Overhaul Plan Might Change 401(k) Savings Account
The latest tax plan proposed would be the most sweeping overhaul of the tax system if it passes. Included in this legislation is the possibility of making changes to the 401(k) retirement savings plans under the newly introduced GOP tax bill.
Aside from the bill proposing changes and cuts to existing income brackets, it is still uncertain whether the new bill will modify 401(k) plans. The Republican Party controls both chambers of the government, so the possibilities of enacting this latest legislative project are heavily in their favor.
A CNBC report confirmed that a top house tax writer suggested that changes could still happen to 401(k) plans.
“The top house tax writer on Wednesday signaled that Congress could still propose changes to a popular retirement savings plan in its tax bill, contradicting an assurance made by President Donald Trump.”
Elsewhere, the New York Times analysis explained that to cut taxes 401(k) retirement accounts had to be modified in order to pay the $1.5 trillion tax cut, conforming to the report. In addition, supporters of the new tax bill are apprehensive that the President may undermine their efforts.
The message posted by Trump on Twitter two days earlier contradicted what the new bill would do and alter how much money is allocated for retirement savings accounts.
There will be NO change to your 401(k). This has always been a great and popular middle class tax break that works, and it stays!
— Donald J. Trump (@realDonaldTrump) October 23, 2017
American economist and columnist, Paul Krugman, pointed out in a blog post that the new plan was overwhelmingly favoring the wealthiest Americans.
“It´s not difficult to see how the plan is tilted toward the very top. The main elements of the plan are a cut in top individual tax rates; a cut in corporate taxes; an end to the estate tax; and the creation of a big new loophole that will allow wealthy individuals to pretend that they are small businesses…”
Are there growing differences between the commander in chief and congressional Republicans? The answer is uncertain but adds confusion about to this legislative initiative.
A very recent ABC News update said “The Emerging conflict between the White House and congressional Republicans over retirement savings highlights the challenges Republicans will face when they release their full proposal to overhaul U.S tax system.
https://www.youtube.com/watch?v=nz_2Ns9lXwU
For more information on this newly proposed tax plan, The Balance offers a comprehensive study of how this tax plan may work, and how it may affect you. Also, it presents the various frameworks for the different income tax rates.
[Featured Image by Michael Conroy/AP Images]
