Taxes and Retirement Accounts

The Story:

A change in tax law is under consideration in the U.S. Congress that could cap pre-tax contributions to the popular retirement plans known as 401(k)s.

The Controversy:

The suggested cap would mean that millions of American workers would pay more in taxes, to make up for tax cuts elsewhere in the overall reform plan, such as a cut in corporate taxes.

President Trump tweeted Monday morning, October 23, that he does not support such a change, calling 401(k) a “great and popular middle class tax break that works, and it stays!” But details of the still-nebulous reform plan are largely in the hands of the House of Representatives’ Ways and Means Committee and its chairman, Kevin Brady.

The Thing to Know:

Asked Monday whether the President’s tweet affects his committee’s consideration of the 401(k) issue, Brady responded simply “no.”

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