House Committee on Ways and Means Hears Testimony on Tax-Favored Retirement Accounts
July 23, 2012
On April 17, the House Committee on Ways & Means held a hearing on "Tax Reform and Tax-Favored Retirement Accounts" to consider the current menu of options for retirement savings. This hearing was part of a series that Chairman Dave Camp (R-MI) has convened to examine how the Internal Revenue Code may be simplified in comprehensive tax reform.
According to Chairman Camp, the hearing's purpose was to explore whether, as part of comprehensive tax reform, provisions of the tax code could be modified to enhance retirement plan simplification and efficiency. One of the hearing witnesses promoted consolidation of various plan types (e.g., 401(k), 457, and 403(b) plans and various small business plans). David John, senior research fellow with the Heritage Foundation, testified that proposals of the Bush Administration to streamline several types of retirement savings accounts into a Retirement Savings Account (RSA) and Employer Retirement Savings Account (ERSA) should be revisited with revisions to the original proposal. While Chairman Camp stated that he has not reached conclusions regarding whether or how retirement incentives should be restructured, he did voice support for simplification as an overarching goal.
Other tax reform proposals have included calls for consideration of reductions in contribution limits for tax deferred retirement plans and IRAs. But notably, none of these calls has come from members of Congress. Congressman Levin (D-MI) stated that retirement incentives should not be scaled back to pay for a reduction in tax rates or to finance deficit reduction. No Member of the Committee voiced support for a proposal to reduce the existing limits for IRAs and qualified plans.
To read the witnesses' prepared testimony from the hearing, visit http://waysandmeans.house.gov/Calendar/EventSingle.aspx?EventID=289485. An archive of the webcast of the hearing can be found by visiting http://waysandmeans.granicus.com/ViewPublisher.php?view_id=2 and clicking on "Full Committee Hearing Webcasts."