‘No change’ in 401(k) $18,000 cap: Trump
President Trump on Monday promised “no change” to workers’ 401(k) retirement plans — just days after reports that Republicans were weighing a move to slash the annual cap on annual contributions.
“There will be NO change to your 401(k),” Trump (left) tweeted. “This has always been a great and popular middle class tax break that works, and it stays!”
Republicans, as part of a plan to offset an expected drop in tax revenue from the White House’s ambitious tax overhaul framework, reportedly had been discussing lowering the cap on tax-deferred payments to $2,400 from the current $18,000 level for most workers.
By lowering that cap, Uncle Sam’s tax revenues would increase because less employee income would be shielded with the 401(k) provision.
If enacted, US workers would have to switch to Roth IRAs, which are taxed on the front end but are shielded from taxes on the back end when the money is withdrawn.
The IRS was also expected to raise contribution limits next year to $18,500.
The Fidelity Group, the second-largest money manager in the world with $4.5 trillion, told The Post on Friday that the proposal under consideration by Republicans “greatly concerned” them.
Gov. Cuomo called plans in Washington to eliminate state and local tax deductibility a “modern form of treason” — and urged New York’s congressional delegation to block the anti-New York measures or face a voter backlash.
“I think it’s a modern-day form of treason, and they have to be held accountable,” Cuomo said on NY 1 on Monday.
Earlier, Cuomo and Sen. Chuck Schumer (D-NY) blasted the impact curbing or eliminating the local and state deductions will have on highincome, high-taxes states like New York.
Even a cap rather than an elimination of the state and local deductions would hit New York’s wealthiest particularly hard. The highestearning 1 percent of New York taxpayers generate 42 percent of the state’s income tax and benefit greatly by federal write-offs on their tax returns.
But Schumer claimed middle-class New York homeowners could also see “taxes going up — not down,” under tax proposals being discussed by President Trump and the GOP-led Congress.