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Issues in the Republican tax plan — Business Report

Issues in the Republican tax plan — Business Report

Rep. Kevin Brady, the chairman of the House's tax-writing panel, wouldn't rule out changes to the program used by 55 million US workers who hold some $5 trillion in their 401 (k) accounts, a system that has become a touchstone of retirement security for the middle class.

Changes are needed, but not like this.

She adds that if Congress caps the contributions individuals can set aside in their 401 (k) plans at such a low level, this will only exacerbate the current retirement crisis where USA workers do not save adequately for retirement. It was originally designed in the 1980s to be a supplement to pensions plans, not the main way Americans save for retirement.

No formulation of the current proposal is close to that. No one thinks this is adequate in terms of saving for retirement. The yearly maximum pre-tax amount allowed for each employee is $18,000, and it is set to increase next year to $18,500. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in nearly any type of investment, including real estate without custodian consent. Over time, the money grows, creating a nice nest egg. It's more expensive initially because the saver is paying the tax in advance, reducing the amount initially going into the account.

No surprise, Democrats are pouncing on the Republican retirement moves. Trump's partisan tax cut bill differs from that one in three major ways: It helps the rich at the expense of the middle class, it would explode the deficit, and it hasn't gone through a thorough, bipartisan process.

On Monday, Ivanka Trump kicked off her tour to stump for the Trump administration's tax package with a town hall in Bucks County, Pennsylvania. It also eliminates many tax write-offs. The challenge now is to make the numbers work in the first decade, giving irresistible tax relief to individuals as well as businesses.

I'm certainly aware of the broader circumstances: Republicans have made massive tax breaks for people who don't need them the centerpiece of their governing agenda, and if they fail, GOP officials fear looking inept. It's a way for the government to get revenue sooner. You put the money in on an after-tax basis.

The Republican tax cut increases the standard deduction from $12,000 for a married couple to $24,000.

Vice President Mike Pence, in a Tuesday speech to the GOP-leaning American Enterprise Institute, noted that Trump "doesn't like talking about tax reform, he likes talking about tax cuts because he wants the American people to know we are cutting taxes for every American".

"The president will get much of what he wants I think in tax reform, but we are a co-equal branch" said Sen.

Even President Obama saw this and admitted we should do something about it.

Brady's counterpart in the Senate, Republican Orrin Hatch of Utah, also indicated that possible changes to 401 (k) s remain on the table. She doesn't. "The Republican Plan takes retirement tax breaks from middle-class workers to pay for tax cuts for billionaires", she continued.

Although it's more expensive to save in a Roth 401 (k) today, those who use the account will likely end up better off in retirement, according to John Beshears, the lead author of the Harvard study and a behavioral economist and assistant professor of business administration at Harvard Business School.

Byerly said more details of the legislation would be released next week.

"This would be the worst time to dis-incentivize people from saving for their retirement", Johnson said.

What Congress is reportedly considering is the exact opposite. About 55 million Americans have a combined sum of more than $5 trillion invested in 401 (k) plans. They also will work longer and spend less, which will not help grow the USA economy.

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