exchange between White House press secretary Sean Spicer and
a CNBC reporter on Thursday led to a moment of confusion over
whether the Trump administration’s new tax plan would mean
retirement accounts would lose their tax-exempt status.
That move could throw the retirement-savings industry — with
about $7 trillion parked in 401(k) accounts and a similar amount
in IRAs — into chaos.
The White House subsequently clarified that 401(k) plans would
not be affected if the tax proposal became law.
But the misunderstanding was another product of the vagueness of
the tax plan, which says only that it would “eliminate
targeted tax breaks that mainly benefit the wealthiest
Here’s the exchange between Eamon Javers of CNBC and Spicer:
Javers: “Can you lay out what the president’s
vision is for 401(k)s, and specifically tax deductions
surrounding those? Does the president imagine removing those
deductions entirely, or is he going to protect them?”
Spicer: “So the secretary of the Treasury and
Director Cohn yesterday both talked about that. The current plan
both protects charitable givings and mortgage interest, and
It was immediately apparent that Spicer may have misspoken. In
rolling out the plan on Wednesday, Trump administration officials
spoke about the elimination of deductions like state
taxes. The administration said that only charitable contributions
and mortgage interest deductions would be spared.
But retirement plan contributions are tax-exempt,
meaning taxpayers don’t have to report them as income.
Still, it took a clarification after the fact from the White
House to sort it all out.
“Retirement saving is an exemption, not a deduction, and Sean was
referring to deductions,” a White House official told Business
Insider. “The president’s tax-reform plan protects homeownership
and charitable-giving deductions as well as retirement saving.”
That’s not the only aspect of the plan that’s unclear. Earlier on
Thursday, Treasury Secretary Steven Mnuchin said he couldn’t
guarantee whether the
middle class would see a tax cut under the plan, because the
proposal presented Wednesday is still short on specifics.
Here’s the video of the press briefing. You can watch the
exchange between Javers and Spicer at the 1:08 mark.
Brett LoGiurato contributed reporting.