Contact: Kristin Lawton, 202.408.9788
Apr 15, 2015
Nation's Top Leaders in Asset Building Advocacy Unveil Major Tax Reform Agenda
Alliance of 30+ Organizations Proposes Solutions for Addressing the Wealth Gap, Asset Poverty
Washington, D.C. - In a letter addressed today to the Senate Finance Committee, the Corporation for Enterprise Development (CFED) and PolicyLink joined leaders from more than 30 other organizations urging Congress to adopt unique tax reform recommendations aimed at shrinking the wealth gap and helping lower-income households save and build assets. Proposed reforms include universal savings accounts that start at birth, establishing a New Entrepreneurs Tax Credit, bolstering the President's myRA proposal and improving the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC).
The groups behind the letter make up the Tax Alliance for Economic Mobility - a national coalition working to advance federal policies that expand savings and investment opportunities for lower-income households through reform of the U.S. tax code.
Currently in the U.S., four out of 10 households - and two out of three households of color - do not have enough savings to cover three months of living expenses at the poverty level if their income is disrupted. Yet they are unable to access billions of dollars in incentives embedded in the federal tax code to encourage household saving and investment. Instead, most of that money goes to the wealthy. According to an analysis by CFED, the top 1% of households received more in tax benefits in 2013 than the bottom 80% combined from the largest of these tax programs.
The Alliance's recommendations fall into the following priority areas:
- Encouraging child savings by establishing universal savings accounts at birth, reforming the federal 529 account structure to facilitate more inclusive plans and establishing a "Kid's Roth" IRA.
- Supporting economic mobility and financial security by making permanent key provisions of the EITC and CTC currently scheduled to expire in 2017, expanding the EITC for childless workers, creating a Financial Security Credit and enacting a Universal Savings Credit.
- Maximizing access to retirement savings by expanding the Saver's Credit, supporting federal Auto IRA policy and expanding myRA.
- Expanding access to higher education by reforming the American Opportunity Tax Credit and making it permanent and fully refundable.
- Supporting homeownership by either capping the mortgage interest deduction or turning it into a credit and supporting alternatives approaches that build wealth rather than subsidize debt.
- Supporting new entrepreneurs by establishing a New Entrepreneurs Tax Credit and creating retirement bonds for new business owners.
A full copy of the letter can be found here.
CFED empowers low- and moderate-income households to build and preserve assets by advancing policies and programs that help them achieve the American Dream, including buying a home, pursuing higher education, starting a business and saving for the future. As a leading source for data about household financial security and policy solutions, CFED understands what families need to succeed. We promote programs on the ground and invest in social enterprises that create pathways to financial security and opportunity for millions of people. Established in 1979 as the Corporation for Enterprise Development, CFED works nationally and internationally through its offices in Washington, DC; Durham, North Carolina, and San Francisco, California.
PolicyLink is a national research and action institute advancing economic and social equity by Lifting Up What Works. Founded in 1999, PolicyLink connects the work of people on the ground to the creation of sustainable communities of opportunity that allow everyone to participate and prosper. Our work is grounded in the conviction that equity - just and fair inclusion - must drive all policy decisions.