Reduced Tax Incentives Will Lead to Less Retirement Security
Retirement security requires planning, commitment and investment over many years. Employer-sponsored retirement plans provide a framework for those efforts, thanks to many features and protections that make them attractive to employees and employers. But quite apart from the essential role that retirement plans play ensuring income security, is an indisputable fact: they constitute a large pool of investment capital in our country, which is indispensable to economic growth. According to the Federal Reserve Flow of Funds Accounts, as of the 4th quarter of 2013: households owned retirement assets totaling $19.6 trillion, excluding Social Security. For comparison’s sake, corporate equities totaled $13.9 trillion in that same period. Reducing incentives for these plans could erode their value to the detriment of both the retirement security of an aging population and an economy that has yet to adequately create jobs. It is against this background that the comprehensive tax reform draft (“Draft”) unveiled recently by House of Representatives Ways and Means Committee Chairman, Dave Camp (R-MI), deserves attention. Chairman Camp is to be applauded for recognizing that tax code changes are needed to allow individuals and businesses to prosper. But given the imperative to help Americans achieve retirement security and the reality that…
