Yes, it\u2019s dead on arrival, so perhaps not worth spending too much time with.<\/p>\n
But, via Forbes<\/a>, here\u2019s the administration\u2019s spin, \u201cTax Reform That Promotes Growth and Opportunity<\/a>.\u201d \u00a0This seems to be a document which gives he highlights of his \u201cbudget\u201d (which contains so many new tax policies it doesn\u2019t seem right to call it a \u201cbudget\u201d at all), without specific details, but it\u2019s still instructive.<\/p>\n Doing a quick skim:<\/p>\n Child care:<\/b><\/p>\n Everyone\u2019s talked about, and the administration had to drop, a proposal to eliminate 529 plans. \u00a0But no one has mentioned the fact that he also proposes a similar swap for child care: \u00a0eliminate the Dependent Care Spending Account, which enables families to pay for child care on a tax-free basis, up to $5,000 per year, in favor of more tax credits to fund daycare for lower-income families. <\/p>\n The Budget would triple the maximum Child and Dependent Care Tax Credit (CDCTC) for families with children under age five. It would also make the full CDCTC available to families with incomes of up to $120,000, benefiting families with young children, older children, and elderly or disabled dependents. Meanwhile, the Budget would eliminate tax preferences for flexible spending accounts for child care expenses.<\/p><\/blockquote>\n UPDATE: \u00a0thinking about this some more, it really seems to miss the mark to dump the Spending Account, given that the cost of daycare is fundamentally a cost of employment, no different than permitted deductions for other expenses incurred during the cost of employment (such as the cost of professional memberships not paid for by the employer). \u00a0In my view, child care ought to be fully deductible up to the net income of the lower-paid = \u201cmarginal-income\u201d (that is, income at the margin, that can be viewed of as paying the marginal tax rate) spouse. <\/p>\n In this way, it\u2019s more equivalent to existing tax breaks that allow you to pay for commuting costs \u2014 commuter train passes, for instance \u2014 pre-tax.<\/p>\n For the administration to lump direct payments to families in the same conceptual category as pre-tax spending shows they\u2019re missing the point.<\/p>\n On the other hand, if they wanted to whack at something for which there\u2019s no conceptual justification, it would be the Health Care Spending Accounts and the catastrophic plan-associated HSA\/MSAs. \u00a0The former has already been scaled back with a cap in the ACA, but was always a hard one to justify except as an outright tax break, because of the \u201cuse it or lose it\u201d provision. \u00a0Is the concept that it\u2019s \u201cunfair\u201d to ask people to pay tax on money spent for medical expenses because they can\u2019t be helped? \u00a0If so, why do it in such a clumsy way?<\/p>\n Retirement:<\/b><\/p>\n The Budget proposes to automatically enroll workers without access to employer-based retirement plans in IRAs through payroll deposit contributions at their workplace (with an option to opt out).<\/p><\/blockquote>\n No details here, and I am in favor of some form of mandatory provision of retirement savings (with opt out), if done right, but what is this doing in a budget document? \u00a0Has the President lost any understanding of how to interact with Congress?<\/p>\n Also:<\/p>\n The Budget would prohibit contributions to and accruals of additional benefits in tax-preferred retirement plans and IRAs once balances are about $3.4 million, enough to provide an annual income of $210,000 in retirement.<\/p><\/blockquote>\n This was what had me looking this up in the first place \u2014 an article in the Tribune <\/a>this morning gives a somewhat different explanation: <\/p>\n The administration\u2019s current proposal would cut people off from saving in their 401(k) if they are on course to have at least $3.4 million for retirement.<\/p><\/blockquote>\n And further raises the issue that the definition of what it means to be \u201con course to have\u201d this cash is one that could cause headaches for many people who may start their careers off well but then fall onto hard times. \u00a0What\u2019s more, neither this \u201cbudget document\u201d nor the Trib article specifies the administration\u2019s intention as far as people with both 401(k)s and traditional pension plans. <\/p>\n Now, if I go back to this document, I can work my way back to the White House site\u2019s section<\/a> on the budget, but now I\u2019m flailing in my struggle to find any specifics. \u00a0Even in a document entitled \u201cThe Budget,\u201d<\/a>\u00a0 it\u2019s still just fluff without details. <\/p>\n So that\u2019s it for now \u2014 and time to log in to work.<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":" Yes, it\u2019s dead on arrival, so perhaps not worth spending too much time with. But, via Forbes, here\u2019s the administration\u2019s spin, \u201cTax Reform That Promotes Growth and Opportunity.\u201d \u00a0This seems to be a document which gives he highlights of his \u201cbudget\u201d (which contains so many new tax policies it doesn\u2019t seem right to call it […]<\/p>\n","protected":false},"author":2209,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[52,5,26],"class_list":["post-66","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-government-spending","tag-obama","tag-taxes"],"yoast_head":"\n