Flake, Brat Reintroduce Bill Creating Flexible, Tax-Free Savings Accounts

Press Release

U.S. Sen. Jeff Flake (R-Ariz.) and Rep. Dave Brat (R-Va.) today reintroduced the Universal Savings Account (USA) Act. The bill would simplify saving for consumers by creating tax-free savings accounts without the penalties and restrictions that are common with other tax-advantaged savings options.

Common savings vehicles currently available to consumers, such as IRAs and HSAs, lock money up for extended periods of time and limit withdrawals for specific expenses. These excessive restrictions and penalties for tax-advantaged accounts dis-incentivize saving. In contrast, the USA Act would incentivize saving through the creation of flexible Universal Savings Accounts (USA). The bill would allow any individual over the age of 18 to contribute up to $5,500 in after-tax income annually into a USA where those funds can grow tax-free. Account holders would always have the freedom to withdraw those funds tax-free at any time and for any reason.

"Our tax code shouldn't penalize savers for accessing their own money when they need it," said Flake. "The USA Act provides consumers with a flexible option to grow their savings tax-free without burdensome federal restrictions."

"During my visits with constituents around Virginia's 7th District, I have heard anecdotes from countless individuals and families who are struggling to manage and save for the future and potential emergencies," said Brat. "This legislation will help put Americans on the path to the brighter and sustainable economic future we all seek."

Background:

The USA Act is supported by Americans for Tax Reform, the Association of Mature American Citizens, the National Taxpayers Union, and Financial Services Institute.
Flake and Brat introduced the Universal Savings Account (USA) Act during the 114th Congress. More information on the original bill can be viewed here.

Source