Over the next few months various committees in Congress will be looking at tax issues. The Senate Finance Committee will be looking at the various tax-favored retirement programs.
The Joint Committee on Taxation (JCT) recently released a report to the congressional tax-writing committees showing that the collective tax incentives provided to retirement plans constitutes the second-highest federal tax expenditure (i.e., loss of revenue to the federal government) for the next five years (more than $800 billion, including defined contribution plans, defined benefit plans and IRAs), behind only the tax exclusion for the provision of employer-sponsored health insurance — American Benefits Council
Most Americans are unaware that their retirement and health benefits are the two largest revenue losers to the federal government. In the case of retirement plans that loss is actually a deferral of taxation, but health benefits in the form of employer-paid coverage is tax free. Significant tax reform must include a review of these items. However, making changes will be difficult (and hopefully quite gradual) as the greatest negative impact will be on middle class Americans.
Imagine if you earn $50,000 a year and suddenly you have additional taxable income of $8,000 representing your employer’s payment toward your family’s health insurance.
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You have a good point, but politicians are responding to individuals and interest groups who simply want more without concern how it will be paid for or convincing themselves if only the “wealthy” pay more in taxes nobody else has to.
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This government wants to financially ruin the middle class. It is getting to the point that people have to borrow and run up a deficit
within their own finances just to keep giving to the government to blow without any accountability. The more we have to borrow to pay them, the more we go into debt to the point we can’t pay our bills anymore. They are leaving us with “no meat on the bone”! Where does it end? They have to spend within their means just like the middle class does; To bad we can’t find ways to stop paying taxes to increase our revenue just the way they keep trying to find new ways to tax us to raise theirs.
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