Lawmakers cool to changing 401(k) tax benefit

SANDUSKY — Congress is talking about taxing contributions that employees make to 401(k) retirement accounts, but lawmakers who represent the Sandusky area are not enthusiastic. U.S. Sen. Sherrod Brown, D-Ohio, and U.S. Rep. Marcy Kaptur, D-Toledo, said they oppose curtailing the tax benefits of the accounts, while U.S. Sen. Rob Portman, R-Ohio, expressed reservations. U.S. Rep. Jim Jordan, D-Urbana, has not expressed an opinion yet, a spokesman said.Under current law, employees at companies with 401(k) accounts are allowed to put pretax wages into the accounts, giving themselves a tax break.But some Republican lawmakers have discussed reducing the amount of money that can be be put into such accounts without being taxed. One proposed limit is $2,400.According to the Employee Benefit Research Institute, contributions above the $2,400 limit would be treated as money put into Roth Individual Retirement Accounts is treated. They would not provide an immediate tax benefit, but could be withdrawn tax free. The institute says that the $2,400 proposal would affect 38 percent of taxpayers who earn less than $25,000, and 87 percent of those who earn more than $100,000.Taxpayers with Individual Retirement Accounts are allowed to decide between a traditional IRA, providing an immediate tax deduction, and Roth IRAs, which don't provide immediate tax benefits but aren't taxed when retirees are withdrawing money.401(k) accounts have become a very common way for people to prepare for retirement, particularly with the decline of traditional pension plans. In 2015, the latest year for which data is available, 54 million Americans had active 401(k) accounts.Brown told reporters on a telephone conference call Wednesday that he opposes making changes in tax deductibility for 401(k) accounts."This is a another attack on the middle class," he said, adding that Republicans apparently are more interested in giving tax breaks to corporations and to the rich.Portman isn't thrilled about the idea either, said a spokeswoman, Emmalee Kalmbach."Senator Portman will judge any final tax plan on its totality but he has previously expressed his concern about lowering contribution limits and moving more towards a Roth model where contributions are taxed at the start of the process because he believes it may discourage people from saving for their retirement," she said.Kalmbach also pointed the Register to a Fox Business article, in which Portman said he was "deeply concerned" about the proposal, adding, "I don't think you want to disincentivize retirement savings in any way right now."Kaptur took to social media to declare her opposition."When decades of corporate giveaways and stripping away health care isn't enough to break middle class, the House Republicans propose this…" she wrote, linking to a New York Times article about the Republican proposal.Jordan hasn't expressed an opinion on the issue yet, spokesman Darin Miller said. He noted that President Donald Trump apparently isn't a fan of the idea and said it seems unlikely the proposal will be part of any final product. Reach reporter Tom Jackson at jackson@sanduskyregister.com and follow him on Twitter @jacksontom.Marcy KapturRob PortmanU.S. Sen. Sherrod Brown