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T20-0142 - Eliminate Tax Expenditures for Retirement Saving Plans (Present Value Method), Baseline: Current Law with TCJA Permanently Extended, Distribution of Federal Tax Change by Expanded Cash Income Percentile, 2020

The present value method estimates the tax expenditure as the difference between the present value of future retirement benefits from current-year contributions to retirement saving plans and the present value of those retirement benefits if the same amounts were saved outside of qualified retirement plans and were not eligible for the savers’ credit. The benefit of future taxes as a share of income are adjusted to account for a measure of additional future income from current-year saving. Baseline is the law in place as of December 18, 2019, with the Tax Cuts and Jobs Act of 2017 (TCJA) permanently extended.

May 7, 2020