The 401(k) tax deduction would disappear.
Workers would instead get a tax credit for 401(k) contributions.
The tax advantage of contributing to a 401(k) would be reduced for higher earners and increase for low and middle earners.
The creation of an automatic 401(k) for workers without access to a workplace retirement account.
Allowing caregivers to make catch-up contributions to retirement accounts.
Older article but good refresher to visit your 401k administrator/broker just in case....
Dems have been looking for many ways to infiltrate retirement savings. They’ll ease into it, then f us all.
A tax by other means
Free college to the freeloaders and F#$% those who actually save and pay for college. That’s their goal.
The arrogant government feels it has the right to retroactively change the terms of this “benefit.” You cannot trust them to give you a “benefit.” If it’s a real benefit, they will soon take it away from you.
Well, the real question here is whether three halves of the deductions for passive income not definitely related to gross income is greater than one third the greater of taxes reclassified under high tax kickout or interest earned on private activity bonds, less of course the form 4797 long term suspended loss minus .15 of the allowable ordinary qualified gain after passive/at-risk limits. Finally, one always has to consider one’s qualified business income allocated to SSTB and whether that impacts the qualified dividend that didn’t meet required holding period, to say nothing of the section 179 carryover, let alone the allowable ordinary 1231 qualified gain after passive/at-risk limits.
And don’t even get me started on deductions for passive income not definitely related to gross income.
Yes, the tax code definitely needs to be more complicated than it already is.
‘The tax advantage of contributing to a 401(k) would be reduced for higher earners and increase for low and middle earners.
The creation of an automatic 401(k) for workers without access to a workplace retirement account.’
My friends tell me where this is wrong. Anything to get those workers a $500k nest egg asap would be good. Didn’t read the article.
About 5 years ago, the CA RATs floated something about getting rid of 401k.
This is their first step.
He has to get it to pass Congress. We’ll see.
What about IRA’s?.......................
step 1: give them a tax credit
step 2: seize their accounts and dribble it back a fraction of it to them using the social security administration
I am of the opinion that tax credits are easier to tinker with and ultimately easier to do away with altogether. Looks to me like a half step on the way to elimination.
The government would love to nationalize all retirement accounts - and give you a “monthly guaranteed retirement income” that will be pennies on the dollar as to what you receive now.
This is what has been proposed.
So what is a “higher” earner in the opinion of Biden, $25000 and up?
I am no financial expert at all, but I decided several years back to invest in the Roth 401K. I simply pay my taxes on the front end.
Of course, no one is safe while the legislature is in session.
I am the exception to the upper income rule. I don’t utilize 401k, IRA or Roth.
I have felt that money the government earmarks as retirement savings is at risk. I would rather have it in my pool of “normal” money.
The Roth is exponentially worse IMO. You pay taxes going in, and trust the govt to keep the rules constant so you don’t pay going out. Crazy. On top of that, my highest tax rate level should be now, not while retired. So the math of paying in, but not out makes no sense.
I don’t trust them to leave the rules constant long enough for me to retire. F them.
No he hasn't. BuckFiden is mentally incapable of proposing anything more complex than what flavor of pudding he should get today.
His HANDLERS proposed this. His HANDLERS propose everything BuckFiden is credited for. They even admit it. See here.
In democrat speak, a “tax credit” really means a transfer payment. In theory you only get a tax credit if you earn enough to owe taxes, thus you get a credit against the tax that would otherwise be due.
However, most democrat inspired tax credits, e.g. the earned income tax credit and the child care tax credit do not require that you paid any tax at all . . . the government still pays it out to the “deserving” people who otherwise would get no benefit from a retirement contribution.
This is a stealth way to increase tax on those who can pay, (as evidenced by their 401(k) contributions) and redistribute it by direct payment (called a “tax credit”) to those who earn no money and pay no tax.
One drawback of this plan is it will raise the MAGI for some of the democrat’s loyal followers who get benefits based on income. Obamacare would be one example. An early retiree receiving Obamacare subsidies may no longer be able to work part time because putting some of the money into a 401K/IRA to
to stay under income limits doesn’t work anymore. This could impact Vets receiving VA benefits based on income as well.