ACLI backs House Ways and Means’ Tax Reform 2.0 Plan

The House Ways and Means Committee introduced a series of bills last week – known as Tax Reform 2.0. – that would make permanent the tax cuts approved last year and help people save for retirement.

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Specifically, the legislative package includes the Protecting Family and Small Business Tax Cuts Act of 2018 (H.R. 6760), sponsored by Rep. Rodney Davis (R-IL), which would make permanent the individual and small business tax cuts passed last year in the Tax Cuts and Jobs Act.

It also includes the Family Savings Act of 2018 (H.R. 6757), sponsored by Rep. Mike Kelly (R-PA). The Family Savings Act would allow small businesses to join together to create a 401(k) plan, eliminating the age limit on IRA contributions, create new Universal Savings Account (USA) savings account that families can use any time and contribute up to $2,500 each year. The measure would also modify section 529 college savings plans so they could be used for fees, books, supplies, and other expenses.

Further, the American Innovation Act of 2018 (H.R. 6756), sponsored by Rep. Vern Buchanan (R-FL), would let business owners deduct up to $20,000 of start-up and organizational costs. Currently, they can deduct up to $5,000, each.

“The Tax Cuts and Jobs Act changed the trajectory of our economy for the better. Now it’s time to change the culture in Washington where we only do tax reform once a generation. This legislation is our commitment to the American worker to ensure our tax code remains the most competitive in the world,” House Ways and Means Committee Chairman Rep. Kevin Brady (R-TX) said.

The American Council of Life Insurers (ACLI) praised the House Ways and Means Committee for including retirement security provisions in tax reform bill.

“The retirement security provisions address some key challenges facing retirement savers, which include saving enough for retirement and ensuring retirement savings can last a lifetime.
More needs to be done by Congress, but Chairman Brady’s initiative represents a good first step,” ACLI President and CEO Susan Neely said.

Neely said the bill is consistent with President Donald Trump’s executive order to encourage small employers to join together to offer workplace retirement plans.

“This could go a long way to helping the 16 million independent contractors in the gig economy. Many of these independent contractors work for small employers who often lack the resources to offer retirement plans to their employees on their own,” Neely said.