Tax reform continues to be discussed on the Hill, and by President Trump and his cabinet appointees. But what about NAPA Net readers?
Last summer we asked readers to weigh in some specific potential aspects of tax reform – the impact if pre-tax deferrals were limited, or if contribution limits were tightened – and, as you might expect, NAPA Net readers were concerned.
The history of retirement plans and tax reform suggest that what’s good for one won’t be as good for the other. Indeed, the last time we had tax reform the impact on retirement savings limits – and plan formation – wasn’t good (to say the least).
Talking Tax Reform?
As it turns out, about a quarter (29%) are talking about tax reform to their plan sponsor clients, a nearly identical number (27%) are not, and 18% are talking to some, but not all. The remaining 26% were split nearly evenly between saying it “depends,” “only if they bring it up” and “not yet.”
Those that are talking about it, are sharing a variety of messages:
- 67% – be careful/vigilant
- 52% – what happened before could happen again
- 33% – the importance of current tax preferences/deferrals
However, only about 16% are encouraging them to contact their representatives in Congress. One reader noted that they were encouraging folks to “take advantage of current programs (historically have been grandfathered), no one knows what will happen.”
On the other hand, more than 90% of this week’s respondents said that their plan sponsor clients are not asking about tax reform.
There were, as you might expect, a number of comments this week. Here’s a sample:
“‘Tax reform’” is too vague at this point. I don’t see the advantage in bringing up unknowns – it’s like a news reporter trying to be the first one on a story that hasn’t yet unfolded. I don’t believe in conjecture when it comes to consulting with my clients. As it is, the administration is so erratic in their handling of important issues that I prefer not to say anything until I can discuss something that will have a genuine impact on my clients, and share it knowledgeably.”
“There is absolutely a better/fairer/simpler way to do taxes. If enacted, it would mean the end of many CPA and TPA jobs. There will be plenty of fear and professional lobbyists involved, but in the end it will all be okay – we’re clever people, and we’ll just direct our energies elsewhere!”
“There are so many big lobbying groups looking after their own interests, it will be difficult to get anything done.”
“Our industry has done a poor job improving the access to quality 401(k) plan-like accounts to those working in very small employer organizations. I believe the act of saving for retirement is currently too dependent on either the employer or government (myRA) providing a retirement vehicle. Why can’t we allow a more consumer-centric organization like Amazon or Walmart the ability to offer retirement savings products? They enjoy an excellent reputation for superior customer service and continually driving down costs. I would trust Amazon more to handle my retirement savings than I would a state-run, government-backed plan.”
“Now that you mention it, perhaps we should be contacting all of our clients (we’re a TPA). We should let them know to ‘make hay while the sun shines’ and that if they want the sun to keep shining they’d better contact their representatives. I feel a newsletter coming on…”
Thanks to everyone who participated in our weekly NAPA Net reader poll!
Do you have a burning issue to discuss? Got a question that you’d like to run past our readers? Post it in the comments section below, or email me at Nevin.firstname.lastname@example.org.