Tax Experts/question

[adp98]

I should probably know the answer to this but I don't. Therefore, I have a question for the collective wisdowm of the board. I saw that President Obama has put a proposal in his budget to end the tax benefits of 401K contributions for "the rich". His definition of rich has been anyone making over $200K. So here is my question: I run a small business. Let's say I provide a 5% match to all my employees. Let's say I have 5 of them making over $200K per year. If this proposal were to go into law, what does that mean? Specifically, here is my question; I understand the 401K contributions would no longer be pre-tax. Given today's savings rate I think that's a terrible idea but I'm the same guy arguing for a flatter code so yes I'm inconsistent here. I'll own that fact. However, what does that then do the matches employers provide? Since employers can provide the match up to 16,5; does this now all go away due to the tax treatment for "rich" employees? Isn't that a really stupid policy given the dearth of savings in this country? You don't only penalize the original contributions but I would assume, and this is the purpose to my question, the employer matches would not receive any preferential tax treatment either. Can anyone confirm how this might work?

 

[RSTRICK30]

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[novaclassof90]

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[adp98]

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[adp98]

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[RSTRICK30]

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[adp98]

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