Yeah i dont get what raradevils is trying to say either.

It's a nice preview of the ballgame though. **** over middle and really upper middle class people with stuff like taxing 401k contributions and limiting some deductions in the name of FISCAL RESPONSIBILITY (cue media nuthugging) to fund free money for the nine figure and up crowd aka PRO GROWTH REFORM

Why discourage even more from saving for retirement?

I was totally wrong on this trump rally.. i have probably lost a good 300k in equity these past 9 months, based on his rhetoric and his "tax reform" , I still dont see how this will work , i must be wrong though, as the equity market keeps proving me wrong.

You have to appreciate the irony though that the people who would be getting their comeuppance are a bunch of Trump voters. Of all the regressive GOP plans this one actually ISN'T THAT EGREGIOUS. It's obviously a hilarious political disaster but that's exactly why: the Republicans are ostensibly out of poor people to fleece and are finally coming for the middle class / upper middle class, the GOP bread and butter voter. The only thing more fitting would be if they started taxing Fox News viewers by the hour like a toll.

I am not defending this idea but you have to smile a little bit that it's basically intra-GOP class warfare. Fleece their voters with some measure of financial security to let their fabulously wealthy ones buy a 3rd yacht.

Option A actually already exists and is call an "after-tax 401(k)." They have a theoretical advantage over a taxable account in that you can defer tax on dividends and change your investment allocation tax-free, but the conventional wisdom I have heard is that converting the investment return to ordinary income (as opposed to potentially LTCG) is a huge downside that overwhelms any benefit for most types of investment.

Do you think turning all traditional 401k in to Roth 401k in terms of tax policy, encourages or discourages saving for retirement?

This is actually a pretty interesting question - "is there a position so low even the republican party won't touch it?" Cynical as I am I would have always assumed that there must be, but who knows anymore? Fascinating times we live in.

How about this idea - no back-end taxation, but you must make all withdraws in the form of novelty coffee mugs?

in my experience ,, being able to deduct 5,500 on line 32 from your AGI and even doubly so if you qualify for form 8880 , makes it the slam dunk play to invest some money now .. making all 401k , a roth , will for sure discourage savings imo..

As I said, as far as regressive taxation goes, this ain't that regressive. Or it is, maybe, since all the benefits are going to give even more money to the super wealthy. But 401ks were mostly ignored by like 60-70% of Americans. It's taxing the top 20-30% who used of Americans who used 401ks to give even more to the top 1%. I think it's a huge political loser but it's like far less regressive than say going after Obamacare imo.

We should require all publicly traded securities to be marked to market on an annual basis. That nets ~$50 billion from Gates, Buffett and Bezos in Year 1 alone.

I don't disagree. I was mostly referring to the cynical logic of the scenario, not the outcomes as such.

I mean, if Congress passed a bill that required everyone with at least 6 figures in their retirement account to have a pound of flesh cut out of them with a rusty knife, I wouldn't be thrilled about it personally, but that's not to say it wouldn't be good policy.

Don't know if you're joking or not, but it's probably more reasonable to repeal the corporate income tax and tax shareholders on a pass-through basis for their proportionate share of the company's income.

So you get off on stabbing old people?

Just got a tingle thinking about how rustled the GOP would be if Democrats ever eliminated the deductibility of business interest.

Was completely serious about mark-to-market. There's no justification for deferring the tax on appreciated public stock.

OTOH, I don't think passthrough tax for corporations is actually feasible. You can't practically have random shareholders getting handed a tax bill for income they haven't seen. Also, are you making foreigners file a U.S. tax return on their investments in public securities? That's not going to be popular. A better approach is to allow corporations to deduct the dividends they pay to shareholders (which is how REITs work currently) but to otherwise leave the corporate tax system in place.

also, if you mark to market per year,, it would also disrupt the market , as say you owned WTW in january at 12, and say it closes this year at 40 , you would be responsible for 28 dollars per share in tax liability .. so most people/fund would have to liquidate and it would totally affect securities ,, also there is a distinction between lt holdings and short term holdings,, would the IRS tax at one and then credit for the other? also, if there are losses , we are talking about huge possible refunds.. if you want to make the irs smaller and simplify the tax code.. this is not the play.

Of course there is - liquidity. It's the same reason we allow companies to defer tax on certain installment sales. If you force people to pay tax on unrealized appreciation, you effectively force them to sell shares to finance that tax. And it would simply encourage firms to take themselves private so that they don't have observable market prices that would trigger taxation.

If you can't practically have random shareholders getting handed a tax bill for income they haven't seen, how can you have random shareholders getting handed a tax bill for appreciation they haven't realized? Are you making foreigners file a U.S. tax return on their unrealized appreciation in public securities? It seems like all the challenges you point out with pass-through taxation apply equally well to taxation of mark-to-market gains.

isn't a better question, from republicans, what % of the electorate contribute to 401ks?

Surely pissing off the entire 80k-300k household income crowd by screwing with retirement planning is not a winning idea politically?

racism tho

I agree with Yglesias that we should support precision withholding, i.e. having the IRS send you a receipt and bill/refund every year instead of requiring people to file their own taxes. We can probably fit that on a postcard.

Smooth functions ftw. Almost everybody who will file taxes have access to computers that can do calculus.

In 2014 Dave Camp (chair of Ways and Means) proposed a tax reform plan that included changing 401k contributions. His proposal was to allow only the first half of allowable annual 401(k) contributions to be pre-tax, and the rest to be in some kind of Roth-style plan. He also proposed removing limits on Roth IRA contributions and to completely get rid of traditional IRAs, so there's that.

Trump voters will gladly pay more tax to have an unabashed racist at the helm

Eh, a tax increase on me will almost be worth it if it causes awval to lose his ****, as we have fairly similar incomes.