Congressional Republicans are scraping the bottom of the barrel to find ways to pay for their package of tax cuts for the rich and, to that end, they're considering taxing retirement savings.
According to the Wall Street Journal, House Republicans may place a cap on contributions to 401(k) plans.
One idea is to limit the amount of pretax money households can sock away for retirement saving. [...]
Lobbyists and others in the retirement and financial services industries who have spoken to congressional staff and committee members say lawmakers are looking at proposals that would allow 401(k) participants to contribute significantly less than what is currently allowed in a traditional tax-deferred 401(k). An often mentioned amount is $2,400 a year. It isn’t clear whether that would only apply to 401(k)s or IRAs or both.
As you know, Republicans also intend to eliminate the estate tax and that makes this especially grotesque. Rich families with estates worth more than $11 million don't need 401(k) plans.
What this and all the other GOP proposals have in common is that none of it would cover the cost of their tax cuts for the rich. The GOP could pass every single measure they're considering, from taxing retirement savings to eliminating state and local tax deductions, and it still wouldn't cover the gargantuan cost of $5 trillion in tax cuts.
You could add all the spending cuts they're considering together and that also wouldn't cover the cost of their tax cuts.
You could add all of the spending cuts and the tax hikes for the middle class together (about $3 trillion) and that still wouldn't cover the cost of $5 trillion in tax cuts for the rich. Republicans believe the other $2 trillion will be collected from the crumbs that trickle down into Oliver Twist's empty bowl.