Reply to Should 401ks be phased out?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]401k should not transfer tax liability to a new state. It is deferred compensation and should be taxed in the state where it was earned, like CA does for RSU awards.

401k is for the MC/UMC, not the rich. 
[/quote]
I feel this is fair, even though I have a place in a low tax zone!    [/quote]

This is dumbest idea in this thread, and wow, is there a lot of competition.

Aside from the legal inaccuracies (a 401k is not deferred compensation), and practical difficulties (people move jobs/locations often, so you'd be forcing senior citizens to file taxes in multiple states, when all they have is ordinary income), think about the impact on the DC region.

I (and millions of others in the DC area) can just as easily live in any of the three local jurisdictions.  Your suggestion is that I am going to be stuck paying the tax rates of my current residence throughout my retirement.  For a variety of reasons, at the moment I have decided that I am willing to suffer the higher tax rates of MoCo at the moment, even though it would unquestionably save me a significant amount of money if I lived in VA.  That calculus changes considerable if I am committing to these tax rates for my entire life, and I imagine it would for many others as well.  The impact on MoCo's tax base if this lunacy were enacted is hard to describe.  It sure would juice Va's property values, though.

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