President Trump flatly contradicted the Congressional establishment this morning, tweeting that despite what some are proposing, 401K plans are safe.
“There will be NO change to your 401(k),” Trump wrote on Twitter. “This has always been a great and popular middle class tax break that works, and it stays!”
House Republicans have been pondering a plan to slash the income which American workers can save in tax-deferred retirement accounts.
The effect of that policy would have amounted to a huge tax hike on middle-income workers.
More from Breitbart:
House Republicans were considering a plan to slash the amount of income American workers can save in tax-deferred retirement accounts. Currently, workers can put up to $18,000 a year into 401(k) accounts without paying taxes on that money until they retire and withdraw money from their savings. Proposals under discussion on Capitol Hill would set the cap lower, perhaps as low as $2,400. The effect would be a huge tax hike on middle class workers.
The plan to lower the cap on 401(k)’s would not have had an effect on long-term government deficits. Instead, it would have raised tax revenue now but lowered it in the future, since the retirement savings would already have been taxed. But taxing the savings would have had an impact on household budgets and may have discouraged workers from saving, increasing their future dependence on government benefits.
The 401(k) tax deferral is very popular with middle class workers. It is also supported by the financial sector, which benefits when Americans buy mutual funds and securities with their retirement savings.
There had been rumors for several months that GOP lawmakers were plotting to raise taxes on retirement savings, although no formal proposal had emerged. Trump’s tweet appeared to indicate that the president had either not been briefed on such plans or had lately decided to oppose them.
Let’s hear it for our populist President, beholden to no one but American citizens!