GOP Tax Plan Keeps Uncle Sam’s Hands Off Your Retirement Savings
Republicans unveiled the most significant tax cut in three decades Thursday without making any changes to the popular retirement savings tax break previously considered for the chopping block.
The House tax writing Ways and Means Committee has been scrambling in recent weeks to fit the steep rate cuts promised by GOP leadership into the previously established budget framework, that allows for a $1.5 trillion deficit increase over the next decade. Lawmakers considered a reduction in the tax exempt dollars Americans can place in retirement savings account as one strategy to offset the revenue draining cuts.
There will undoubtedly be substantial tradeoffs and modifications to the legislation before it is signed into law, however, as it stands the now, the legislation leaves the retirement savings tax break totally untouched.
The future of the retirement savings tax break has been a source of division between Ways and Means Committee Chair Kevin Brady and President Donald Trump. Trump preempted Brady and appeared to narrow his options by publicly ruling out the elimination of the tax break more than a week before the bill was set to be released.
Following reports that Republicans were considering cutting the break on retirement savings to raise revenue, Trump publicly ruled out the possibility in a tweet.
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
Trump urged Brady to definitively rule out any changes to the provision during a personal call roughly one week before the bill was released, according to Politico. Brady, undeterred by Trump’s support for the retirement savings break, was still considering changes to the policy until one day before the bill was released.
House Republicans reportedly cheered Brady’s decision to leave the tax break in place at a hearing for the bill’s unveiling Thursday.
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