Tax Reform Could Mean a Push Toward Roth
Budget-scoring rules could mean that tax reform is likely to include incentives or mandates toward post-tax contributions, writes Morningstar's Director of Policy Research Aron Szapiro.
With a new Republican president, Capitol Hill Republicans are talking seriously about passing a major tax reform package. If they do, what can ordinary investors expect? While much is uncertain, due to arcane budget rules I think we can expect a shortsighted emphasis on Roth-style retirement savings.
Major tax reform is tough; the last successful effort was in 1986 and before that in 1954. Recent history has not revealed much enthusiasm among members of Congress for the tough choices involved in a large tax code overhaul. Indeed, last session, Representative Dave Camp's tax reform bill never got much momentum. But, many experts think this year might be the year.