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Research report

Flattening Tax Incentives for Retirement Saving

Barbara Butrica, Benjamin H. Harris, Pamela Perun, C. Eugene Steuerle
June 30, 2014
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Abstract

Under current law, a large share of tax benefits for retirement saving accrues to high-income employees. We simulate the short- and long-term effect of three policy options for flattening tax incentives and increasing retirement savings for low- and middle-income workers. Our results show that reducing 401(k) contribution limits increases taxes for high-income taxpayers; expanding the saver's credit raises saving incentives and lower taxes for low- and middle-income taxpayers; and replacing the exclusion for retirement saving contributions with a 25 percent refundable credit benefits primarily low- and middle-income taxpayers, and raises taxes and reduces retirement assets for high-income taxpayers.

Research Area

Individual Taxes Retirement
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Meet the Experts

  • Barbara Butrica
    Senior Fellow
  • Benjamin H. Harris
  • Pamela Perun
  • C. Eugene Steuerle
    Institute Fellow and Richard B. Fisher Chair
Brief

Understanding the Maze of Recent Child and Work Incentive Proposals

Elaine Maag, Nikhita Airi
June 1, 2020
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