Hatch: Tax Reform Not Crumbs for Retirement Plan Participants
Sen. Orrin Hatch (R-UT) on March 1 outlined some of the effects the recently enacted tax reform law had on retirement plans and their participants. Hatch made his remarks at an American Enterprise Institute (AEI) event
concerning assessments of the impact of the new Tax Cuts and Jobs Act.Hatch
hailed the U.S. retirement system and its success as “the largest accumulator of middle class wealth in history” and noted that it has resulted in trillions of dollars in pension assets owned by households and non-profit organizations. He noted that the amount saved has increased almost 200% in the last 20 years, and said “that is a direct connection between success in American corporations and the growth in Americans’ retirement assets.”
While not mentioning her by name, Hatch assailed comments by House Minority Leader Nancy Pelosi (D-CA) in which she called the increased pay and benefits individuals have received due to the enactment of the TCJA “crumbs.” Hatch said that regarding the corporate tax cuts the TCJA brought about, rather than considering them as resulting in “crumbs” for individuals and that “the real money is going to stock buybacks,” one should “remember that the largest group of beneficiaries are those with pensions, IRAs and 401(k)s.” He added, “Nearly $4 of every $10 invested in stock ownership is currently held in retirement plan accounts. That is the largest owner category of overall stock ownership in the United States.”
Hatch cited examples of employers enhancing their benefit plans and increasing compensation as a result of the TCJA, including Aflac, which he noted is providing a one-time $500 contribution to the 401(k) accounts of its employee plan participants and doubling its 401(k) match to 100% of the first 4% of compensation.
“Every day we hear new stories about how companies are responding to lower rates,” Hatch said. “Lowering the corporate tax rate has always been about helping the middle class.”
Hatch also noted that “we were able to pass a pass-through reduction regime that provides virtual equivalence to the corporate rate,” which he termed “a significant reform” for small business.