Published: Fri, October 27, 2017
World | By Paul Elliott

Key Republican Opens Door to 401 (k) Change Despite Trump Tweet

Key Republican Opens Door to 401 (k) Change Despite Trump Tweet

Sound familiar? The GOP is handling its tax-overhaul roll-out in nearly the exact way it did the Obamacare repeal effort and hoping for a different result. And on that, there's a large partisan divide: 79 percent of Republicans and 19 percent of Democrats share that sentiment.

But GOP leaders were scrambling to overcome pockets of resistance to the measure from hard-right Republicans unhappy about deficits and lawmakers from NY and New Jersey who fear the subsequent tax bill would take away a deduction for state and local taxes that's especially valuable to their constituents. Rank-and-file members fear they'll have two choices: Swallow whatever bill their leaders devise or blow their self-imposed deadline of sending a bill to President Donald Trump before year's end. One of them is Rep. Peter T. King from NY.

So based on what we know now, the tax proposal will probably amount to between $150 billion and $220 billion per year. Unlike Kansas' plan, it also increases the standard deduction and child care tax credits.

The poll found opinions on Trump's plan were sharply divided along party lines, with 56 percent of Republicans and just 9 percent of Democrats supporting it. Trump and Sen. Bob Corker of Tennessee reignited their feud, hurling insults over Twitter. The president and GOP lawmakers are seeking a major legislative victory before the 2018 elections.

"I think it will discourage retirement saving", says Matthew Rutledge, a research economist at the Center for Retirement Research at Boston College. "By now, we all know better than that". "He needs them all", Tuz said.

Late last week, word went out that the Republicans, seeking a way to pay for tax cuts, were casting a covetous eye on the money Americans are able to save in their 401 (k) workplace retirement accounts. "Republicans control the House, Senate and the White House - we should be passing a budget that reforms mandatory spending and balances over time", Jenkins said in a statement. Lowering the amount could help to raise tax revenue as the GOP looks for ways to offset across-the-board individual and corporate tax cuts.

More than 62 million Americans - about a third of the nation's adult population - have put money into 401 (k) retirement plans.

Brady, for instance, told reporters on Wednesday morning that he's still looking at curtailing tax-free deposits in 401 (k) retirement accounts, a move that could raise revenue in the near term as retirement savings shift to Roth-style accounts that are funded with after-tax earnings.

The president's feuds with Corker and Flake won't make it any easier.

And a senior Republican senator signaled he'd vote for a tax bill even if it crimped 401 (k) tax benefits. That is the goal of tax reform and the reason I support it in the Senate.

Brady was expected to introduce tax overhaul legislation next week, as Trump has long promised.

The road ahead contains landmines - including must-pass bills such as averting a government shutdown on December 8 and renewing the expired Children's Health Insurance Program.

The Republicans are straining to find new revenue sources to pay for anticipated tax cuts exceeding $1 trillion.

The Treasury Department has published a list of the biggest tax bills between 1940 and 2012, measured not only by contemporary dollars but also by inflation-adjusted dollars and as a percentage of gross domestic product - two metrics that experts say give a sense of scale. The framework would reduce the top personal income tax rate from 39.6 percent to 35 percent, but now lawmakers are discussing keeping the top personal income tax rate at 39.6 percent for those with taxable income of more than $1 million. "There is a lot that needs to get done", said Rep.

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