President Trump’s budget director has warned that the White House would veto any congressional tax reform plan that cuts the amount Americans can put into their 401(k) retirement plans.
Backing up the president’s warnings with a veto threat, Office of Management and Budget Director Mick Mulvaney said the programs are a massive tax benefit to the middle class and cutting it would betray Trump’s promises to protect them.
Reducing the amount wage earners can put into their tax deferred retirement plans, he said at Georgetown University Wednesday night, “is a huge tax increase on the middle class.”
Speaking to the school’s Institute of Politics and Public Service at the McCourt School of Public Policy, he added, “I can’t imagine that the House and Senate, controlled by the same party, would actually do something that would dramatically increase taxes on the middle class but if they did we would certainly give serious thought to vetoing it.”
The House is expected to unveil their tax reform plan next week. Key leaders this week said that they were still negotiating a cut to the 401(k) plans.
Mulvaney, who graduated from Georgetown in 1989, also said that the White House hopes to the pending tax plans stick with the elimination of the state and local tax deduction.
He said it is a matter of reestablishing fairness to the tax code, and is a dedication most will not seek after the standard deduction is doubled.
He argued that “most folks” do not itemize on their tax returns, and that increasing the standard deduction will prompt even fewer to itemize.
“We hope it stays in the bill. And we think it’s good policy and we think it helps reestablish the fairness of the credibility of the tax code and brings some fairness back to where it wa before,” Mulvaney said.
Paul Bedard, the Washington Examiner’s “Washington Secrets” columnist, can be contacted at [email protected]
