Getting Better All the Time
As time passed, the Tax Cuts and Jobs Act improved. Early versions of the bill contained several investor-unfriendly items. Chief among them were various suggestions for limiting 401(k) contributions, or perhaps swapping their current-year tax protection for future tax benefits (as Roth IRAs do); and a first-in, first-out (FIFO) requirement that would have eliminated investors' ability to specify tax lots when selling their securities.
The latter proposal was policy-making at its worst. For a very modest payoff--an estimated $2.4 billion over the next decade--the FIFO clause would have greatly complicated investors' lives by encouraging them to hold accounts at multiple brokerage firms. The huge institutional funds would have remained untouched. Harass everyday shareholders while bypassing Harvard's $38 billion endowment fund, staffed with dozens of well-compensated professionals? Genius!
John Rekenthaler has a position in the following securities mentioned above: MORN. Find out about Morningstar's editorial policies.