Chris DeGrassi, Executive Director of the National Tax-deferred Savings Association (NTSA) issued the following statement in response to tax reform legislation unveiled by the United States House of Representatives Ways and Means Committee Wednesday:
“This legislation is being touted by Chairman Dave Camp (R-MI) as a comprehensive simplification of the tax code, but it threatens retirement savings for American workers in traditionally lower-paying professions, such as clergy, teachers, and non-profit employees. Chairman Camp wants the government to take money from these workers who already struggle to save for later and he wants to spend it now.
The legislation seeks $200 billion in new taxes on retirement savings to pay for favors to Wall Street, such as excluding the first 40 percent of investment income from the capital gains tax. To accomplish this goal, the chairman effectively eliminates the main distinctions between private workplace retirement plans, such as 401(k) plans, and public and non-profit workplace plans, such as 403(b) and 457 plans, in the name of tax code simplification and increased short-term revenue. These distinctions were designed to protect traditionally lower- paid workers who feel called to serve society.
Generally speaking, Americans employed by churches, schools, non-profits and state and local governments seek their jobs in spite of what they expect to be lower wages than they might otherwise earn in the private sector. We owe these folks something for their sacrifices, which benefit everyone. The tax code has long provided a quiet and potent incentive to take on these less profitable but immensely valuable careers. This bill threatens to undo retirement plan rules that may seem unnecessarily complicated to an outsider—or even the chairman of the House Ways and Means Committee—but they do both immediate and long-term good for millions of Americans. It would be a tragedy to have to tell all these people their ability to save has been slashed to benefit a few wealthy investors.
We hope these destructive provisions do not survive the legislative process.”
About NTSA: The National Tax-deferred Savings Association (NTSA) is a sister organization of the American Society of Pension Professionals & Actuaries (ASPPA) representing more than 3,000 members. NTSA’s mission is critically important for the public-sector retirement system by enhancing employee empowerment in the defined contribution plan market and developing the tools to help public-sector employees achieve success. For 25 years, NTSA has been nationally recognized for our thought leadership and policy expertise with regard to public-sector retirement plans and represents its membership in Washington, D.C. and state capitals across the country working with public-sector stakeholders, policy makers and legislators to address issues and design retirement plans that improve employee outcomes. NTSA also provides high-quality education, professional development, and information resources.