[phil21]

> I struggle to find any national policy implemented in the last few decades that has truly disrupted the kind of upper middle class voter that has a lot of money in a 401k.

Capping SALT deductions was a big one. For upper middle class folks in HCOL cities this is tens of thousands of dollars of additional taxes being paid.

> If you tax 401ks higher than long term capital gains tax then higher earners just won’t use 401ks/IRAs.

How does that help those who funded a 401k/IRA during their working career? Sure, new earners won't use them but that doesn't help you very much if you're retired. I also don't think it would be more than long term capital gains, it would first start as a very small "reasonable" tax on the top "rich folks" accounts and slide upwards from there like nearly all taxes do.

Totally agree on points 3 and 5, but I absolutely expect my tax advantaged retirement accounts to become less advantaged than they are today by the time I'm drawing on them. You have to collect revenue from where the money is, and with all the talk about "wealth taxes" I predict will eventually hit 401k/IRA accounts as well. I bet it will be politically very popular to add a 5% tax on withdrawals from "millionaire" retirement accounts. Most folks have very little concern over the upper middle classes $3m brokerage account being taxed regardless of account type.

[Grombobulous]

Yeah, the SALT cap is probably the most prominent example. Perhaps even the only example.

Maybe this idea is too much of a stretch, but something to point out with the SALT cap change is that it’s arguably a partisan tax shift for middle class people who live in blue states with higher property values. The tax cut and jobs act was partisan legislation passed by one party with no support across the aisle.

Upper middle class people in red states with less valuable property still experienced an overall tax cut with the same law. I think this legislation was written with the intention of shifting the tax burden from the right to the left, and to make blue states look less attractive.

I’ve conversely seen tax advantaged accounts become more tax advantaged over time. For example, 529 accounts have gained more spend flexibility and the ability to transfer funds to beneficiary Roth IRAs. Dependent care FSA recently had a very significant contribution cap increase.

Still, I don’t disagree with the idea that we should expect our tax-advantaged accounts to eventually be less tax-advantaged, although I think it would be less abrasive for that to be accomplished by slowing down contribution limit increases compared to inflation, or by modifying the underlying tax brackets themselves.