Regardless of how Congress is reshaped in the wake of today’s elections, legislators on Capitol Hill will face a daunting task: reducing the federal government’s budget deficit. Throw in the adverse consequences of letting the Bush-era tax cuts expire in January — referred to by some observers as “Taxageddon” — and the urgency for reforming the nation’s tax code rachets up considerably.
It’s possible that when the 112th Congress reconvenes later this month for its “lame duck” session (set to last just a few weeks), it could take up the issue of tax reform. Whether the tax reform debate begins in the waning days of this year or after the 113th Congress convenes in January, though, one thing is certain: Raising more tax revenue by eliminating or reducing certain tax benefits will be one of the keys to reducing the deficit. The question is: Which benefits will wind up on the chopping block?
The existing tax incentive for 401(k) contributions is on the list of items that taxwriters in Congress expect to look at closely. And if you’re not concerned about that, think again: The last time Congress revamped the tax code — in 1986 — they cut the limit on 401(k) contributions by more than 70%.
That information comes from an “infographic” (see below) produced by the American Society for Pension Professionals and Actuaries. Along with a wide range of other content — including videos, articles, and even an online video game — a series of ASPPA infographics like this one will be featured on SaveMy401k.com, a new website set to launch later this month. The launch of the website will kick off a concerted effort by ASPPA and NAPA to protect the tax-deferred status of 401(k) plans as the debate over tax reform heats up on Capitol Hill. 
Click here for a pdf of this infographic.
