Now: People are encouraged to put away money for retirement into IRAs and 401-Ks because they defer tax on that income right now. (They pay it on withdrawal, during retirement, after the money has earned more money for them, tax free.)
The Republican House Plan: In August (just weeks ago), Trump/Republicans were planning to tax all IRA and 401-K deposits as they went into our IRAs and 401-Ks.
The Trump/Republicans’ tax scam would create a big hole in budget; so, the shift in timing from tax on the back-end to tax on-the-front-end allows Republicans to paper over the hole they would make.
The article on the plan notes: “An estimated $5 trillion is held in 401(k) plans, according to the Investment Company Institute, which represents the mutual fund industry. That’s nearly 20 percent of the total amount of U.S. retirement assets.”
Retirement savings for the middle class is in decline, because real wages have been frozen for about three decades, the middle class has been called on to bailout Wall Street out of their financial debacle and to fund endless wars and to foot the bill for tax cuts to the wealthy; so, it’s not a good time to discourage retirement deposits by eliminating the tax advantage. In fact, it’s a good time to encourage them, to strengthen and increase Social Security.
*Source:
https://www.washingtonpost.com/news/get-there/wp/2017/08/31/the-gop-is-looking-for-ways-to-pay-for-tax-cuts-your-401k-may-bear-the-cost/?tid=pm_business_pop&utm_term=.46da58d1f09e