ARA Issues Retirement Policy Principles for Tax Reform
ARLINGTON, VA – In light of recent press reports in the Wall Street Journal (“How the GOP Tax Bill Could Squeeze Your 401(k)”) and New York Times (“Republicans Consider Sharp Cut in 401(k) Contribution Limits”) regarding proposals involving tax reform and retirement savings incentives, the American Retirement Association has issued a set of retirement policy principles for tax reform.
“We support the tax reform goal of economic growth. However, the retirement security of American workers is just as important,” noted Brian Graff, CEO of the American Retirement Association. “We were very encouraged by the language in the “Unified Framework on Tax Reform” issued by the White House and Republican Congressional Leaders which outlined their intention to retain the tax benefits that promote retirement security, and that specifically stated that “[t]ax reform will aim to maintain or raise retirement plan participation of workers and the resources available for retirement.”
While neither the White House nor Congress has yet proposed anything specific relating to retirement savings, and while acknowledging that numerous recent press reports reflecting rumored possible limitations on employees’ deductions for 401k savings are just that – rumors, Graff cautioned that, as the White House and Congress continue their important work on tax reform, “We strongly suggest they abide by the following principles, which are consistent with the language articulated in their own Framework,” specifically that:
- Any changes to current retirement savings incentives must be primarily aimed at promoting retirement plan participation of workers and encouraging retirement savings, rather than solely for the purpose of raising revenue for other tax objectives.
- Limiting employees’ tax deductions for 401k savings in the absence of other meaningful changes to promote retirement savings by middle class families would be inconsistent with the Framework and would in fact be a middle-class tax increase that directly and immediately threatens workers’ retirement security.
“We certainly understand that positive changes can and should continue to be made to improve, enhance, and expand our nation’s retirement savings system,” Graff said. “The American Retirement Association has been and will always be supportive of changes designed to enhance the retirement security of American workers.”
Media Contact: Nevin E. Adams, JD, (703) 516-9300 Ext. 114, NAdams@usaretirement.org