ESOP Tax Costs Projected at $1.7 Billion

The White House fiscal year 2011 budget estimates that the special ESOP rules will cost $1.7 billion in 2010 and $1.8 billion in 2011. For context, this comes to 1.79% of the total tax costs of retirement plans and 3.2% of the tax costs of 401(k) plans, even though ESOPs have about 30% of the assets 401(k) plans do and roughly the same percentage of employer-contributed assets.