Tax Reform Working Groups Turn in their Homework
Reports from the Senate Finance Committee’s five bipartisan tax working groups have been published, including policy options and recommendations
on savings and investment.
On Jan. 15, the Senate Finance Committee, which has jurisdiction over tax policy, announced that Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Ore.) were launching five tax reform working groups to develop recommendations for comprehensive federal tax reform. Each of the five bipartisan working groups was co-chaired by a Republican and a Democratic member, and was tasked with working with the Joint Committee on Taxation (JCT) to offer legislative proposals.
Among the recommendations of the Savings and Investment group:
- Consider proposals that allow employers to join open multiple employer plans.
- Increase the start-up and matching credits and safe harbors for small businesses that offer a plan, and further increase the credit for employers who offer automatic enrollment plans.
- Consider proposals to expand the safe harbor for automatic enrollment plans and providing a new credit to further help small employers offer matching contributions.
- Allow part-time workers to enroll in plans.
- Provide clarifications related to church plans.
- Permit improvements related to S-ESOP plans.
- Support allowing a percentage of otherwise taxable lifetime annuity payments received by an individual from an IRA or any type of defined contribution plan to be excluded from gross income.
- Encourage DC plans to offer annuities or other installment products as investment options, so that participants can buy these products gradually over their careers.
- Support proposals that prevent leakage and ensure more secure retirements for taxpayers who take advantage of retirement plans.
In April, the American Retirement Association joined with other industry stakeholders in releasing a statement
to the Senate Finance Committee working group on Savings and Investment.