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Generally speaking, employees can defer taxation on up to $18,000 a year with a 401k. The consideration on the table right now is reducing the annual cap to $2400.
47 states impose an income tax. One of the considerations on the table to eliminate the ability to deduct state income taxes.
Then there's the consideration to eliminate the deduction of property taxes.
Any/ all of this could dilute/ wipe out the impact of a reduction in Federal tax rates and would likely hit the middle class the hardest.
Generally speaking, employees can defer taxation on up to $18,000 a year with a 401k. The consideration on the table right now is reducing the annual cap to $2400.
47 states impose an income tax. One of the considerations on the table to eliminate the ability to deduct state income taxes.
Then there's the consideration to eliminate the deduction of property taxes.
Any/ all of this could dilute/ wipe out the impact of a reduction in Federal tax rates and would likely hit the middle class the hardest.
From what I can tell so far, middle income taxpayers will take a hit in a number of areas.
What a horrible idea. One of the few incentives Americans have to save anything for retirement is the tax-deferred 401K. When they take that away, many will have nothing saved when they retire.
one proposal under consideration would be taxing the money that workers place into their 401(k) savings plans up front instead of imposing the tax when they take the money out in retirement — 20, 30 or 40 years hence.
The idea would raise billions of dollars, presumably by removing the deduction that 401(k) savers get by taking $18,000 off the top of their salary before income tax kicks in. People over 50 can put in another $6,000, called a “catch up” contribution, also tax free.
It is not really a tax shelter., since you will eventually pay tax on it. It's just that in retirement you may very well be taxed at a lower rate than you were during your working life. Which is fair. It also encourages people to save for retirement. It is also one of the few ways that poor or middle-class people get a break. I don't know about you, but I submit only the short form of tax return, I don't itemize deductions. I don't really have anything to write off. I'm not able to take off millions in tax breaks like some rich real estate developer.
We should all keep our eyes open. Hidden in all the verbiage of the GOP tax plan will be enormous tax breaks for the top 1 % and a few crumbs for the rest of us.
"the GOP tax plan will be enormous tax breaks for the top 1 % and a few crumbs for the rest of us"
It must be nice to throw out false info all the time.
Generally speaking, employees can defer taxation on up to $18,000 a year with a 401k. The consideration on the table right now is reducing the annual cap to $2400.
47 states impose an income tax. One of the considerations on the table to eliminate the ability to deduct state income taxes.
Then there's the consideration to eliminate the deduction of property taxes.
Any/ all of this could dilute/ wipe out the impact of a reduction in Federal tax rates and would likely hit the middle class the hardest.
But if we can suspend belief for the first 3 or 4 years the plan is in effect we will get a $4,000 wage boost
What I don't quite understand is why employers will give everyone a $4,000 wage increase when there is no impetus to do so, that's never happened in the past. Employers increase salaries when they need to in order to recruit and retain workers, nothing in this conservative wet dream of a tax plan that I can see will increase consumer demand for goods and services. For my husband and I, the extra $1500-$2000 we will have to pay in taxes will mean that much less spending for us.
Today it's the Repubs going after the 401K money. Yesterday it was the Dems going after 401k money.
Don't be naive. Both parties want their hands on that money. 401K's and IRA's sit there untaxed.
Congress has been eyeing and scheming ways to get their hands on that money for at least a decade now if not longer.
Congress is addicted to spending and the only way they can get more money is through us.
And they don't care that there's no more company pensions and that 401K/IRA is your means to save for retirement. They don't care.
This shouldn't become a partisan issue because both sides want their hands on this money which is in the tens of trillions.
All of us should fight this..both Dems and Repubs need to voice their disapproval of this idea.
No provision was made in the Constitution (originally) for taxes on income.
And I should care, because? It's not holy writ. When Benjamin effin' Franklin gets exasperated enough with tax dodgers that he tongue-in-cheek suggests they can try their luck in the wilderness, that's good enough for me. And should be for you, too.
So when are Americans going to get fed up with the Oligarchy ruining people's lives?
Never. I've said it before: The GOP core electorate would gladly live in hovels and eat rats as long as they were promised that their neighbors only got half a rat.
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