EDITORIAL: Trump right on 401(k) plans
"There will be NO change to your 401(k)," Trump tweeted. "This has always been a great and popular middle class tax break that works, and it stays!"
How popular? Up to 55 million American workers have some
Trump is right on this issue.
Still, some Republican lawmakers are indicating they won't rule out the possibility of imposing some kind of cap on the amount that can be put away tax-deferred, or other changes to the 401(k) program.
"We think, in tax reform, we can create incentives for Americans to save more and save sooner, which can help them,"
But we don't understand how removing the tax incentive will encourage people to save more and save earlier; it will, in fact, do the opposite.
We like the idea of cutting and simplifying taxes, reducing the number of tax brackets and doubling the standard deduction, convinced that the latter will help many of us, but we're taking a wait-and-see attitude on whether this overall effort will help average American workers or hurt them. The 401(k) will be a big part of that final picture.
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