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And he still gets a tax break, but just not as big. Yet the fear is he'll turn down the whole tax break because it is not as big as he wants. That's a bit of a stretch.

Actually, depending on the situation, there is no tax break at all, only a tax penalty.

If you are capped at 28% for deductions but it comes out taxed in retirement at the highest rate (let's assume that 39%), then you are actually penalized for saving money in a 401k at that level. You would have been better off paying the taxes immediately and instead invest outside of the 401k for more favorable tax treatment on any gains and dividends.

These proposals don't seem to address what happens with Roth 401ks - but then I have not gotten too deep into this since it is DOA.
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