Senate Finance Retirement Savings Bill Falls Short of Offering Comprehensive Solutions

The recent tax reform bill left the taxation of household savings, including retirement savings accounts, largely unchanged. Last Thursday, Senate Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) introduced the Retirement Enhancement and Savings Act of 2018 (RESA), a bill designed to encourage retirement savings, add flexibility to Multiple Employer Plans (MEPs), and make several other changes. Though this legislation includes a wide variety of changes to retirement savings policy, it falls short of offering more comprehensive solutions, like universal savings accounts, that would simplify how the tax code treats saving and help remove the tax code’s bias against saving. Under the current system, a large portion of retirement savings are rightly subject to just a single layer of personal income taxation, but subject to an extremely complex and confusing regulatory structure. For example, there are almost a dozen tax-neutral retirement…

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