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Rekenthaler Report

Will 401(k) Plans Be 'Rothed'?

Probably not, but it's a possibility.

On the Docket
This week, the Republican Party is expected to release its tax-reform proposal, crafted both by Congress and the White House administration. It is known that the GOP will reduce tax revenues by slashing the corporate rate, probably from 35% to 20% (the White House sought 15% but seems to have compromised) and by lowering the top marginal income-tax rate from 39.6% to 35%. Unclear, however, is which current tax benefits will be eliminated to pay for these tax cuts.

This year's effort, as with so many reform bills before it, has opted against shooting elephants. Companies won't pay a "border tax" on their imports, as the GOP had recommended earlier this year, and home-mortgage payments will continue to be tax protected, as will charitable donations. Consequently, the GOP's tax-reform plan won't be revenue-neutral, absent a heroic increase in GDP growth.