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John,
Our retirement tax system is broken. Each year, it showers hundreds of billions of dollars of tax breaks primarily on the richest and whitest households. But few of these incentives reach the households that need help the most.
In 2019, the wealthiest 10% of households had retirement accounts averaging over $850,000, while accounts of families in the bottom half of the economy averaged under $7,000. White families had an average account balance of $168,500, whereas Black and Latino accounts held $38,300 and $27,300, respectively.[1]
Shockingly, 29,000 of the highest-income taxpayers had amassed taxpayer-subsidized “Mega IRAs” with balances of $5 million or more while half of U.S. households had no retirement savings at all.[2][3]
Right now, Congress is strongly considering including retirement savings tax breaks in must-pass year-end legislation. The tax breaks overwhelmingly benefit the wealthy over low-income and working people. We’re fighting back!
Write to your U.S. senators and representative right now and urge them to oppose including retirement savings legislation in the year-end spending bill that is based on the SECURE Act (HR 2954) and the EARN Act (S 4808). These bills provide a windfall to the rich while offering little help to most Americans.
Instead of exacerbating inequality by giving more tax breaks to the rich to shelter their untaxed fortunes, Congress must advance retirement legislation that favors those most at risk of retirement insecurity―low- and middle-income workers and their families.
We need legislation that reduces the racial wealth gap. And, we need transparency that takes the full effects of these tax giveaways into account instead of accounting games that favor the wealthy and their Mega IRAs.
This means better subsidizing retirement savings of low- and middle-income households. It means lowering taxpayer-subsidized contribution limits for the wealthy, reining in Mega IRAs, and establishing a lifetime limit on tax-subsidized contributions to retirement accounts by the rich. Most of all it means expanding Social Security, the bedrock of retirement for most Americans.
Click here to send a message to your members of Congress to pass retirement legislation that benefits low- and middle-income workers, not bills that distort our retirement tax system into a fortune-building system for the rich.
We must stop the practice of taxpayers heavily subsidizing the retirement savings of the rich and powerful.
Thank you for taking action today,
Frank Clemente
Executive Director
Americans for Tax Fairness Action Fund
[1] “Mega IRAs Reflect Mega Legislative Mistakes,” Tax Policy Center, Aug. 13, 2021
[2] “Mega-IRAs, Mega-401(k)s, and Other Mega-Retirement Accounts: Statement for the Record,” Testimony to the U.S. Senate Finance Committee, August 11, 2021
[3] “Survey of Consumer Finances, 1989 – 2019,” Board of Governors of the Federal Reserve
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