A three-bill legislative package known as Tax Reform 2.0 cleared the House during votes on Thursday and Friday.
Among other changes, the bills would make recently enacted tax cuts for individuals permanent, expand retirement and education accounts and create tax-advantaged Universal Savings Accounts.
While supporters say a second round of tax cuts would lead to continued economic growth, critics point to its $627 billion price tag over the next 10 years, based on an analysis by the Joint Committee on Taxation. That’s on top of the $1.5 trillion the already-passed cuts are projected to cost during the same period.
While the legislation is expected to be dead on arrival in the Senate, some proposed changes to retirement savings could remain in play.
“Thanks to the Tax Cuts and Jobs Act, we now have one of the most competitive tax codes in the world, and it is imperative we keep it that way. Tax Reform 2.0 makes the individual and small business tax cuts permanent, grows small businesses, and helps families save and plan for the future” said Congressman Mike Johnson.
“Tax reform has already yielded incredible results for our hard-working families and the American economy. This bill makes these tax cuts permanent so that the people can keep more of the money that they earned. I believe that people and families – not the government – are the best stewards of the money they earned, and they deserve to spend their money as they see fit” said Congressman Ralph Abraham.
“The Senate is not expected to debate these bills,” said Nicole Kaeding, director of federal projects for the Tax Foundation, a nonpartisan tax-policy research group.
She said, however, that several of the legislation’s retirement-related provisions are similar to an existing bipartisan bill in the Senate that could be considered later this year.
That bill, the Retirement Enhancement Security Act (S. 2526) would remove the 70½ age limit for making contributions to traditional individual retirement accounts and would make it easier for small businesses to band together to offer 401(k) plans, among other provisions.