- Rep. Kevin Brady, the head of the House Republican tax-writing committee, said changes to retirement savings accounts could still be included in the plan.
- President Donald Trump said there would be “NO changes to your 401k” in a tweet Monday after reports of a cap on contributions to a traditional, tax-deferred account.
- Brady also said Republicans are nearing an agreement on changes to the state and local tax deduction.
Rep. Kevin Brady, the chair of the House Ways and Means Committee and author of the forthcoming Republican tax reform bill, said Wednesday that the legislation could still include changes to the way many Americans save for retirement.
Brady’s comments were a shift from President Donald Trump, who on Monday attempted to quash reports that the party was considering a cap on contributions to traditional 401(k)s and IRAs.
Reports began circulating Friday that the tax legislation’s writers were set to impose a $US2,400-per-year limit on contributions to tax-deferred retirement accounts to help pay for upcoming legislation to overhaul the tax code. Subsequent contributions would have to go in a Roth account, which is taxed up front, according to the talked-about changes in news reports.
Some feared the proposed change could depress how much Americans saved for retirement.
Despite Trump’s promise that “there will be NO change to your 401(k),” Brady said Wednesday that potential tweaks are still on the table.
“We think in tax reform we can create incentives for Americans to save more and save sooner,” Brady said when asked about Trump’s tweet at an event hosted by the Christian Science Monitor. “We are exploring a number of ideas in those areas.”
Brady did not specify exactly what the changes to retirement accounts could be, but he said GOP tax writers are involved in “discussions with the president all focused on saving more, saving sooner.”
Brady also said that the committee is close to an agreement on the state and local tax deduction, which the original Republican tax framework said would be eliminated.
Republicans in states where people use the deduction heavily, such as New York and California, have resisted the repeal of the deduction.
The tax bill from Brady’s committee is expected to be released on November 1.
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