This is not the tax plan voters asked for

Schumer: Can't Compare Trump's Tax Reform to Reagan's

GOP lawmakers have been considering changes to the 401 (k) structure, such as limiting the amount of tax-deferred contributions employees can make, as a way to help finance tax cuts.

Consider what happened when the Obama White House proposed capping a similar plan that allowed Americans to save money for their children's educations. Unfortunately, it appears that many middle-income homeowners will see their taxes go up, not down, under the Big 6 plan.

If Republicans in Congress really want to get Americans to save more, there are three easy changes the government could make that are widely endorsed by many experts, including Richard Thaler, victor of this year's Nobel Prize in economics.

The same dynamics are at play today with the 401 (k). Boston College's Center for Retirement Research crunched the numbers from 2016 to come up with the following distribution of retirement savings and 401 (k) participation among working-age Americans. But it also opens the door to a fourth bracket on high earners. And lower income workers would not get any more help.

"I just can't imagine not getting it done", said Rubio.

Congressman Kevin Brady, R-Texas, chairman of the tax-writing Ways and Means Committee, is one of the main proponents of changing the 401 (k) rules, a major disagreement with President Trump, who tweeted Monday that 401 (k) s are a "great and popular middle class tax break" that he does not want to change. The cap is set to increase to $18,500 in 2018. "It depends on what you do with the rest of the money", says Justin King, a policy analyst at the New America Foundation. But with 20 Republicans voting no, including some in high-tax states who were anxious that Trump's plan to end certain tax breaks would harm their constituents, the vote was a nailbiter. They don't want to deal with another controversy.

Sen. Marco Rubio echoes that urgency, but told Fox Business Channel, that he's confident they can get it done.

Progressive politicians are caught in a bind here.

Over the last 30 days, roughly 75 companies - ranging from delivery service United Parcel Service Inc (N:) to hotel operator Hilton Worldwide Holdings Inc (N:) - have discussed how they would benefit from a corporate tax cut on conference calls with analysts, according to a Reuters analysis of earnings call transcripts, a sign that Wall Street is increasingly focused on the tax bill.

With Republican leaders battling to show themselves as true standard bearers for the middle class, eyeing next year's midterm elections that are deemed essential to retaining their majority, the 401 (k) issue has become a flashpoint. "We'll lose the House, probably lose ground in the Senate and President Trump has got a profile different from the party - there's kinda two or three different Republican Parties now, I guess. I want people to keep more of what they earn regardless of where they live", he said. "I think people would have a reason to ask, 'well, what's the point?'" "He needs them all", Tuz said. That will make it tougher to power-wash the reeking stable that is today's tax structure. Other economists have found this figure unlikely and say there is no way corporate taxes can ultimately benefit middle-class households so much and that the estimate is based on too many assumptions.

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