The next few days, if not months, will no doubt see a great deal of debate about the details of President Obama’s tax code and retirement reforms. But Americans appear univocal on at least one thing when it comes to retirement: tax incentives that promote retirement savings work and need to be left alone.
This is according to a survey by the Investment Company Institute which found that a majority of U.S. households are opposed to reducing or removing tax incentives that encourage putting money into defined contribution plans. The study found this to be true of households both with and without existing retirement plans.
The findings were in keeping with ICI’s stance on the benefits of retirement tax incentives – and the negative impact that Obama’s proposed caps on 401(k) contributions and other limits on tax deferrals would have.
“All workers, regardless of income, benefit from the current tax treatment for retirement plan saving, and we urge policymakers, as they consider legislation in this area, not to curtail these important incentives to save for retirement,” ICI President and CEO Paul Schott Stevens said in a statement.
The ICI surveyed more than 3,000 Americans for the report, titled “American Views on Defined Contribution Plan Saving.”
The survey found that:
- Eighty-eight percent of households disagreed with the notion that the government should take away the tax advantages of DC accounts, and 90 percent disagreed with reducing the amount that individuals can contribute to DC accounts.
- Even among households not owning DC accounts or individual retirement accounts, more than eight in 10 rejected the idea of taking away or reducing the current tax treatment of DC accounts.
- Eight in 10 households with DC accounts said the tax treatment of their retirement plans is a big incentive to contribute.
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