More Disruptive Than the Fiduciary Rule?

By ASPPA Net Staff • January 26, 2017 • 0 Comments
Sure, you’ve spent a year getting ready for the fiduciary rule — but are you ready for this?

Tax reform is the topic du jour in the nation’s capital. The headlines have been filled with promises from both President Trump and nearly every one of his cabinet appointees to do something about tax reform.

But how will they pay for it? Or more precisely, who?


Well, as recently as Jan. 24 Treasury Secretary nominee Steve Mnuchin said in his nomination hearing with the Senate Finance Committee that, “We should, in a bipartisan fashion, work to increase retirement savings for all Americans,” which he described as “an essential feature of overall tax reform.”

Ah, but what might that mean?

Indeed, while the House blueprint pledges to “continue the current tax incentives for savings,” it directs the House Ways & Means Committee to “consolidate and reform the multiple different retirement savings provisions in the current tax code to provide effective and efficient incentives for savings and investment.” So while the current retirement savings vehicles — like the 401(k) — will not be removed from the tax code under the House Republican plan, those vehicles could be combined into one “cookie cutter” approach.

And House Ways & Means Chairman Kevin Brady (R-Texas) has previously invoked the spirit of the Tax Reform Act of 1986 as a model — a basis that should be of concern to those interested in encouraging retirement savings. Along with the changes in corporate and individual rates, at that time the 401(k) deferral limit was capped at $7,000, greatly diminishing not only the ability of individuals to save for retirement, but the incentives for those who decide to establish and maintain these programs for others.





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