House Majority Leader Kevin McCarthy said Sunday that the Republican tax plan won’t limit the amount of money individuals can contribute to their 401(k), during an appearance on Fox News.
His comments follow members of the House Committee on Ways and Means floating the idea to cap 401(k) contributions at $2,400 annually as a way to pay for their plan to significantly cut tax rates.
“I think 401(k)’s are very important,” he told host Maria Bartiromo. “What you’re going to find out in our plan is that we’ll raise the amount of [money] that you can put in.”
The California Republican said the GOP is committed to constructing a plan that encourages more Americans to invest for retirement
“The more than individuals can invest their own money, the better off we are in the long-term,” he continued. “They’ll have more capital, and they can protect themselves in the future and they are not looking to government.”
The Ways and Means Committee is slated to unveil its legislative text on Wednesday, but a divide within the conference remains on whether the bill should eliminate state and local tax (SALT) deductions.
McCarthy noted Republicans plan on raising the standard deduction, noting the change will likely lead to fewer people itemizing due to their increased savings.
“Going forward, I say let’s look to see what Kevin Brady brings out on Wednesday,” he said, adding a number of ideas are being considered to ensure they won’t increase tax burdens on certain states. “But the one thing that is very important to those members that have come from states concerned with SALT, they have been so productive in expressing what their districts are looking at. We’ve been looking at the numbers. They’ve been expressing what they want to see, and at the end of the day, their voice will be heard in what we’re able to put forward for them.”
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