White House considering tax incentive for more Americans to buy stocks, sources say

I'd like to see congress enhance the retirement savings credit. Make it actually useful.

Would increase the stock market value as money comes in. But I fully embrace an idea to make stupid people understand that investing their money is a good idea. I think it would be better to do it through 401k or Roth plans though

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But I fully embrace an idea to make stupid people understand that investing their money is a good idea

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Don't know if this will help them, about 25% of the employees at my company still won't invest in the 401(k). A few are making decent money and have minimal bills (car note, low rent...), but will try to brag about how much they have sitting in savings & CDs.

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could invest $10,000 on a tax-free basis, although officials noted these numbers are fluid.

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There was previously a plan for a Roth-like universal savings account, which I thought was awesome (instead of having to save/invest for a specific reason).

This sounds similar, but I hope it’s not exclusive to stocks. Even though that’s where I would put the money, I don’t think it’s a good idea to only favor a specific asset class since people have different needs/goals/timelines that may not fit only asset class, plus I think this make an asset bubble more likely than otherwise.

frick all that. They just need to index LTCG to inflation. The President can do this unilaterally. Why hasn’t he done it yet?!?

He’s a little.....














Slow

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Trump should allow pretax payments of student loans as well.

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thats a true game chsnger for a lot of people honestly.

id love to see that although i dont have loans so doesnt help me.

I mean I'm all about having more tax advantaged methods for investing/saving etc. But I have to imagine this mostly helps high earners.

You're either in a position where you're already maxing out IRAs/401ks etc, and need more places to put money.


Or youre at a job that doesn't offer a 401k and your limited to an IRA. In which case, We can't even get people to fund an emergency savings account, let alone budget for money to go into the stock market for tax advantages.

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I really don't understand why this isn't a slam dunk thing they can get passed asap. It's an easy win that would help millions.

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Well I see a couple of potential issues.

The first issue, might just be my confusion, but I don’t understand what they mean by taxed when withdrawn as well.”

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Money put into the account would be done so on an after-tax basis, and taxed when withdrawn as well; but any accumulation of profits during the investment timeframe, known as capital gains, would not be taxed.

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So is it’s invested after taxes (like a Roth) and then taxed again on withdrawals except for capital gains, doesn’t that imply that I’m paying taxes TWICE in the contributions, presumably at the higher ordinary income rate?

Is that’s the case, then I would rather put it into a taxable account and pay lower capital gains (if long-term), because it would take a would take a considerable amount of time and growth to match the contribution amount, just to match the same taxable amount, and then even more time and growth for the savings on the capital gains tax liability to match the savings on the contribution income tax liability.

And the other issue is that with no tax deduction for contributions, the only people who would benefit from the tax free capital-gains withdrawals (unless it’s short-term) are those with a high enough taxable income to meet to have a long-term gains tax liability. And that means it would provide disproportionate benefit to those earn a higher income, and the benefit will decrease as income decrease. And on top of that, those who earn a higher income will have a disproportionate ability to invest (more discretionary income).

So if withdrawals of contributions are taxed, it may not even be benefit at all. And if not, it still might not provide much benefit for most people, if any.

Personally I think that they should allow for a pre-tax deduction and tax fee withdrawals of contributions and gains. And even if that meant they would lower the contribution limit and/or phase out the deduction as income increased (provides more pre-tax savings to those with less capital gains tax savings), that would be much better than what they proposed.