Another Bill (Inclusive Prosperity Act of 2019) Trying to Fee 401k Plans

This month Sen. Bernie Sanders (I-VT) and Rep. Barbara Lee (D-CA) introduced the Inclusive Prosperity Act of 2019 in an effort to once again try to tack on fees to 401k plans including solo 401k plans of course.

If the bill passes, a transaction tax ranging from 0.005 to 0.10 percent would apply to trades of stocks, derivatives and bonds.  However, the bill states that “In the case of individuals of modest means who actually trade directly or through brokers, the legislation would provide an income tax credit to offset the entire financial transaction tax for individuals with incomes less than $50,000 and married couples with incomes less than $75,000.”

The bill claims the purpose is to reduce frequent trading in retirement accounts while also collecting more taxes from wealthy investors. The taxes collected would then be used to improve infrastructure and our environment, while also reducing market volatility. It is estimated that the amount of extra revenue generated from the bill is $2.4 trillion during a 10 year span.

Closing comments

This bill is also similar to the Wall Street Tax Act that was introduced earlier this year, was also backed by Sen. Bernie Sanders,  but has not yet passed.  If any of this legislature passes, it will be interesting to see if more retirement account investors such as solo 401k and IRA LLC account holders will invest in alternative investments such as real estate, notes, metals, tax liens and private equity since these types of investments are not traded frequently by their nature of being long term investments.

 

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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