A resolution supporting current tax incentives for 401(k) plans was signed Thursday by more than 100 members of the House, before federal budget negotiations for fiscal year 2013 begin in earnest.
The resolution, called “sense of Congress,” was introduced by Rep. Jim Gerlach, R-Pa., and Rep. Richard E. Neal, D-Mass.
President Barack Obama's fiscal 2013 budget plan calls for reducing to 28% from 35% the exclusion for retirement plan and IRA contributions for higher-income taxpayers. The proposed change would apply to people with adjusted gross income more than $250,000 if filing jointly or $200,000 if filing single.
Various other deficit-reduction proposals in the past have called for limiting the 401(k) tax deduction to 20% or $20,000 whichever is less. No specific proposals have emerged in the current Congress.
The resolution “recognizes that current tax incentives for retirement savings have been successful at helping American workers save for a financially secure retirement, and that retirement savings tax incentives should play an important role in any reformed tax code,” Brian H. Graff, CEO and executive director of the American Society of Pension Professionals & Actuaries, said in a statement.