Trump and US House tax lawmaker reopen door to 401(k) changes

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The House on Thursday narrowly passed the Senate's 2018 budget, clearing the path for a Republican tax plan expected to be unveiled next Wednesday.

The budget vote was close: It was adopted by a margin of 216 to 212, as 20 Republicans joined all Democrats in voting against it - an indication of just how challenging it might be for Republicans to pass the most sweeping tax overhaul in decades.

"Right now we've got $20 trillion in debt; in the next ten years we're going to $30 trillion in debt unless we cut spending", said Cong.

U.S. Rep. Dan Donovan, a Staten Island Republican, led a letter signed by most of his NY colleagues, including Katko, urging Treasury Secretary Steven Mnuchin not to advance a plan that would eliminate the state and local tax deduction.

But GOP leaders were scrambling to overcome pockets of resistance to the measure from hard-right Republicans unhappy about deficits and lawmakers from NY and New Jersey who fear the subsequent tax bill would take away a deduction for state and local taxes that's especially valuable to their constituents.

If top earners' tax rates are not cut, they will fight even harder for their loopholes and exemptions.

"When the possibility of a defection of some Republican senators increases, that kind of puts the whole tax reform thing in jeopardy".

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"I still feel strongly about addressing unsustainable mandatory spending", said Rep. Diane Black, R-Tenn., who chairs the House Budget Committee.

Democrats united against the plan, arguing its tax cuts will pad the bank accounts of the wealthy and the balance sheets of corporations, while delivering modest relief - or none at all - to middle-income taxpayers. "I think we will tackle this important issue in the future". He said he'd like to see the $1,000 credit doubled and made fully refundable and projected the cost would be $435 billion over 10 years. The proposal would lower the corporate tax rate from 35 to 25 percent and cut taxes for small businesses. On Monday, Trump emphatically tweeted that "there will be NO change to your 401 (k)." This year, workers can set aside as much as $18,000 in their 401 (k) plans, while workers age 50 and older can contribute as much $24,000. Many companies match a percentage of their employees' 401 (k) contributions.

The longer tax reform languishes on Capitol Hill, the more time K Street will have to nitpick this legislation to death.

"We want to get this done before the Christmas holiday", said Rep. Diane Black of Tennessee, chairwoman of the House Budget Committee. "And you have to make some dramatic changes to benefits that people across America have come to expect and enjoy".

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

The almost $6 trillion GOP plan calls for steep tax cuts for corporations and promised reductions for middle-income taxpayers, a doubling of the standard deduction used by most Americans, shrinking the number of tax brackets from seven to three or four, and the repeal of inheritance taxes on multimillion-dollar estates.

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