By Pension and Benefits Editorial Staff
Building on the tax cuts enacted in late 2017 as part of the Tax Cuts and Jobs Act (TCJA; P.L. 115-97), the House's top tax writer, Rep. Kevin Brady (R-TX), Chairman of the House Ways & Means Committee, unveiled the Republicans' “Tax Reform 2.0” framework on July 24, 2018. Among the priorities in the two-page blueprint, which he plans to push this fall, is an effort to promote family savings by streamlining retirement savings accounts and creating a new Universal Savings Account (USA).
In addition to USA accounts and expanded 529 education savings accounts, the blueprint calls for “new baby savings” which would allow families to access their retirement accounts penalty-free for expenses relating to the birth or adoption of a child. The proposal would also allow families to replenish those accounts in the future.
Beyond the retirement proposals, the centerpiece of the next tax reform package would aim to make permanent the individual and small business tax cuts enacted under the TCJA and spur business innovation by allowing new businesses to write off more initial start-up costs.
Brady told reporters that he anticipates Tax Reform 2.0 to move forward as three separate tax bills. A House vote on the package is expected sometime in September.
Senate passage unlikely. At this time, the Tax Reform 2.0 package is not expected to clear the Senate in its entirety. It is thought on Capitol Hill that Democrats may support measures that focus on retirement and education savings and business innovation. However, several lawmakers view it as unlikely that Democrats would support a bill that makes permanent the individual tax cuts under the TCJA.
Source: Tax Reform 2.0 framework.
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