So that this would be seen as a tax break for the middle class, and not the rich. It’s progressive taxation. i.e. the rich make enough already, they can handle their own retirement needs without tax breaks.

My questions was somewhat rhetorical. If you poke around this blog enough you can see I’m not a fan of progressive taxation. It’s simply not fair. And I’m not even a rich guy.

This bill was passed back in 1997. Clinton had just won his second term, but the Republicans ran the Congress. I suspect the income limit was a Clinton administration injection in exchange for signing the thing.

I’m always hesitant to answer questions like this without knowing the policy reason for the limit. Do you have any idea why Congress saw fit to put this limitation in place?

To answer the question, though, since there is a limit to how much can be contributed, I would think there is no useful purpose served by disallowing higher-income households to take advantage of this.