One of the more controversial (at least in financial circles) items to come out of the budget recently proposed by the Obama Administration is a cap on retirement accounts.
The idea is to cap retirement accounts, preventing further contributions to tax-advantaged accounts. The reasoning is that, at a certain level, enough is saved up for a “reasonable” retirement and there is no more need for the tax advantage.
Presumably, instead of contributing to tax-deferred accounts, those who reached the cap would no longer be able to take advantage of the savings, and pay taxes on that income, instead of getting a tax deduction. (Of course, there are issues surrounding the fact that, eventually, taxes would have been collected on the money if it were withdrawn from a tax-deferred account down the road.)
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