First, let’s not call this a subsidy. It is not; it is a tax expenditure. A subsidy intends to increase the supply of a good, and I doubt “millionaires” qualifi

First, let’s not call this a subsidy. It is not; it is a tax expenditure. A subsidy intends to increase the supply of a good, and I doubt “millionaires” qualifies as a good so we will set that word aside. 401k capital gains are taxed. That’s one expenditure. The other expenditure is that the contributions aren’t taxed at the taxpayer’s marginal rate at the time of contribution, they are taxed at the taxpayer’s (presumably lower) marginal rate when he is retired. The total tax expenditure is the sum of the cap gains not collected plus the difference in income tax collected, plus the time value of money to cover the delay between tax free deposit and taxed withdrawal, adjusted by some externality such as the tax revenue from alternate saving methodologies. So yes, eventually, the fisc will see its tax revenue. The only problem is that the revenue will be diminished by the delta in marginal rates, the missing cap gains, and delayed by half the average length of a taxpayer’s career.