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senate Bill S. 2492

Do Americans Need More Tax Incentives to Save for Retirement?

Argument in favor

Americans don’t save enough money to adequately plan for their retirement. This tax credit would give working Americans a reward for making contributions to their retirement accounts.

operaman's Opinion
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05/02/2016
No taxing going in and no tax pulling out. Now that's an incentive!
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David's Opinion
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05/04/2016
Incenting people to save is a good initial step. HELPING THEM TO EARN MORE WOULD BE BETTER. Not a different job, but getting more money for the work they do.
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Nancy's Opinion
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05/06/2016
The vast majority of Americans don't make enough to adequately save for retirement. In addition unscrupulous stock brokers often charge fees that substantially eat away at the growth of their retirement funds or sell them "junk funds". Americans need all the help they can get (including more support and better pay from their employers) to be able to live without public support in their old age. Anything that helps including better pay is a step in the right direction.
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Argument opposed

This tax credit misses the mark by only covering Americans that earn less than $32,500 individually or $65,000 for joint filers. That cap should be raised to encourage even more saving.

Alis's Opinion
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05/03/2016
My NAY is not because I don't support retirement savings but because I think this is both inadequate & misguided! People don't save for retirement largely because most Americans don't make enough money to both support their families & save for retirement. Income inequality is not a joke nor the exclusive territory of progressives. It affects all but the very top income bracket & massively cripples the economic well being of most Americans. There needs to be a major rethinking of how our economy works & how we distribute wealth. It is painfully obvious that a country run by oligarchs ONLY BENEFITS OLIGARCHS! So man up & fix this or quit whining!
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B.R.'s Opinion
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05/02/2016
It would help to incent some people to save more, but the caps are too low.
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Leon's Opinion
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05/03/2016
Yes but not this legislation. It should be for all tax brackets or none.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Committee on Finance
    IntroducedFebruary 3rd, 2016

What is Senate Bill S. 2492?

This bill would amend the tax code to broaden the tax credit for contributions to personal or employer-sponsored retirement savings accounts. The following changes to the so-called “Saver’s Credit” would be made:

  • The tax credit would be refundable, so taxpayers get the money back if they have no tax liability;

  • Individual taxpayers (except dependents and full-time students) can receive a credit for 50 percent of their retirement contributions up to $100;

  • The maximum eligibility threshold for the credit would be increased;

  • Tax credits would be direct deposited into the taxpayer’s retirement savings account, such as a MyRA or Roth IRA.

The tax credit would only be available to taxpayers under certain income levels, which would be set at $65,000 for those filing joint returns and $32,500 for an individual.

The Dept. of the Treasury would be required to make educational materials about the benefits of tax credits for retirement savings contributions available to taxpayers.

Impact

Taxpayers who make contributions to retirement savings accounts; and the Dept. of the Treasury.

Cost of Senate Bill S. 2492

A CBO cost estimate is unavailable.

More Information

In-Depth: Sponsoring Sen. Ron Wyden (D-OR) introduced this bill to modify tax incentives in the hope of encouraging more Americans to save for retirement:

“Not only are most Americans not prepared for retirement, but current tax incentives for retirement are skewed towards those who need help the least. It’s a double whammy that’s fueling the country’s retirement crisis. This legislation aims to level the playing field and create an opportunity to help in Oregon and nationwide save.”

This legislation has the support of five cosponsors in the Senate, all of whom are Democrats.


Of Note: The savings rate among Americans has hovered around 5 percent in recent years, which is a substantial decline after having been around 10 percent of personal income from the 1960s into the 1990s. Financial experts agree that the amount a person should be saving varies based on factors like how long they have before retirement, but that often a rule of thumb such as saving between 10 and 20 percent of their after-tax income.


Media:

Summary by Eric Revell
(Photo Credit: Flickr user kenteegardin)

AKA

Encouraging Americans to Save Act

Official Title

A bill to amend the Internal Revenue Code of 1986 to provide matching payments for retirement savings contributions by certain individuals.

    No taxing going in and no tax pulling out. Now that's an incentive!
    Like (19)
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    My NAY is not because I don't support retirement savings but because I think this is both inadequate & misguided! People don't save for retirement largely because most Americans don't make enough money to both support their families & save for retirement. Income inequality is not a joke nor the exclusive territory of progressives. It affects all but the very top income bracket & massively cripples the economic well being of most Americans. There needs to be a major rethinking of how our economy works & how we distribute wealth. It is painfully obvious that a country run by oligarchs ONLY BENEFITS OLIGARCHS! So man up & fix this or quit whining!
    Like (23)
    Follow
    Share
    Incenting people to save is a good initial step. HELPING THEM TO EARN MORE WOULD BE BETTER. Not a different job, but getting more money for the work they do.
    Like (7)
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    Share
    The vast majority of Americans don't make enough to adequately save for retirement. In addition unscrupulous stock brokers often charge fees that substantially eat away at the growth of their retirement funds or sell them "junk funds". Americans need all the help they can get (including more support and better pay from their employers) to be able to live without public support in their old age. Anything that helps including better pay is a step in the right direction.
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    No taxes in or out. Very simple and no being obliged to some politician to give you a "credit" because they "care" or are "fighting for us"!
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    If it has to be this way so be it, but many Americans would prefer a flat tax that lowers taxes for everybody.
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    Yes, all Americans of all income levels should be able to put up to $25,000 a year into an IRA pre-tax and never have to pay taxes on qualified distributions. Basically, combine the benefits of a traditional IRA with the benefits of a Roth IRA, open to all income levels, and a ceiling of $25k adjusted annually for inflation.
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    Yes but not this legislation. It should be for all tax brackets or none.
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    It would help to incent some people to save more, but the caps are too low.
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    Congee needs to prosecute Wall Street for the HUGE losses to everyone's 401k in 2008. What good does it do to save in a 401k when Wall Street can "lose" it? I lost $40000 and by the time I retired, the Fidelity 401k had only gained back $5,000. We pay taxes on Social Security, we pay taxes on even small pensions, and at 70 1/2, we have to start using the savings so we can pay taxes on that.
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    Sounds like a good plan but if the government haves their hands into it it's a waste of time.because that's what social security was set up to do so when you retired you would have some income to fall back on but it would just be stoled but our congress just like they are doing to our social security they have so far stole $3 trillion of our money and gave us back worthless IOU's that they are never going to buy them back and now they are working to close it because they say there isn't enough left in there to keep paying the ones that's on it. Real nice government we have isn't it!!!!
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    Better to give tax breaks to the middle class than large corporations that don't pay taxes at all
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    The incentive should be very simple. If you save for retirement, you won't starve to death. If you don't save for retirement, I hope you know generous people... Sounds harsh but maybe people should start saving money, it's not complicated. I'm in college and working at Dairy Queen currently while trying to build a complaint with my dad that has absorbed a lot of my money and I still have money that I'm saving... Show some personal responsibility, you'll live longer and you won't be a burden on society as a whole
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    The $32,500 cap is too low
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    Because people who work for less than $250,000 can't save.
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    Why not
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    I do not believe that the caps for income on this incentive are high enough. So I wanted to vote nay. But I decided something needs to be done now. I ask Congress to amend to raise the caps to $250,000.
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    Yes, but Americans need to stop being taxed to death. It has gotten to the point that government and lawmakers have become addict to the money Americans make. We need to stop all this addiction and all these free loading JUNKIES...
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    Anything that let's people keep their own money. Taxation is theft.
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    Why limit it to 1,000$? Yes we need incentives.
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