The Generating Retirement Ownership Through Long-Term Holding Act of 2005
THE GENERATING RETIREMENT OWNERSHIP THROUGH LONG-TERM HOLDING ACT OF 2005 -- (Extensions of Remarks - May 05, 2005)
SPEECH OF
HON. PAUL RYAN
OF WISCONSIN
IN THE HOUSE OF REPRESENTATIVES
THURSDAY, MAY 5, 2005
Mr. RYAN of Wisconsin. Mr. Speaker, I, along with Congressman WILLIAM JEFFERSON, introduced today the Generating Retirement Ownership Through Long-Term Holding ("GROWTH") Act of 2005. We introduced this important legislation in an effort to address one of the issues making it difficult for today's working investors to save for retirement. Most of our Nation's mutual fund shareholders report that retirement is the primary purpose for which they are saving. Almost 50 percent of U.S. households now own mutual funds, and 72 percent of fund investors say that their primary goal is to save for retirement.
Mutual fund investors are overwhelmingly middle-income Americans investing for the long term. For many of these investors, mutual funds are the low-cost, professionally managed, diversified way in which they are saving on their own for retirement. Currently, investors who buy shares in a mutual fund and hold for the long term nevertheless find themselves taxed as they go-even though no fund shares were sold and no income was received. This legislation, which I'm proud to introduce along with my distinguished colleague, Congressman JEFFERSON of Louisiana, allows mutual fund shareholders to keep more of their own money to work for them longer by deferring-not avoiding-capital gains taxes until they actually sell their investment. The "GROWTH" Act makes it easier for these individuals to meet their goals and enjoy a secure retirement.
Those investors who opt in advance to leave capital gains generated by the fund manager reinvested in the fund are doing what so many policymakers want to see-they are holding for the long term, contributing to national savings, and building up their own retirement nest egg. Tax treatment that annually shrinks the amount saved-rather than taxing the sale of fund shares when the investor taps the savings-only frustrates the behavior that so many other provisions in the tax code try to encourage.
The GROWTH Act will encourage Americans to save more and to save for the long term to better prepare for a secure retirement. I urge my colleagues to join us in this effort and cosponsor this legislation.
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