Building upon previous advocacy efforts, the New England Council is once again urging Congress to maintain the current tax treatment for retirement savings. This week, the Council sent a letter to each member of the New England Senate delegation urging them to support a bi-partisan concurrent resolution sponsored by Senators Richard Blumenthal (D-CT) and Johnny Isakson (R-GA). The resolution affirms that current tax incentives for retirement savings provide important benefits in planning for a financially secure retirement. The resolution mirrors a resolution filed in the House in late 2011 by Representatives Richard Neal (D-MA) and Rep. Jim Gerlach (R-PA). The Council similarly expressed support for the Neal-Gerlach resolution in 2011, helping attract over 100 co-sponsors for the House resolution. .
Over the past several years, as Congress has grappled with the nation’s fiscal crisis, some leaders in Washington have proposed eliminating tax incentives for individual retirement savings, such as in 401k’s, IRAs and other private retirement plans. The New England Council’s Financial Services Committee, along with other regional leaders in the financial services industry, are concerned about the potentially devastating long term consequences of such a measure. In this week’s letter to the New England Senators, as well as in past letters, the Council outlines the long-term benefits of encouraging Americans to save for retirement by deferring taxation on retirement savings until the funds are withdrawn years later. The Council stressed that the current tax deferral for savings not only promotes individual financial self-sufficiency, but also reduces the burden on our already strained government entitlement systems in the long run. The Council also has concerns that if there is less incentive to invest in retirement savings accounts, there would be a significant impact on the financial services industry, which plays a large role in the New England economy.