FIRST ON FOX: Congressional GOP lawmakers are reintroducing legislation for a savings account option meant to put fewer financial regulations on Americans.
Sen. Ted Cruz, R-Texas, and Rep. Diana Harshbarger, R-Tenn., will introduce the Universal Savings Account Act on Thursday.
The accounts would be similar to a Roth IRA, but there is no age minimum or other restriction to withdraw the funds without a penalty, and the growth of the funds would not be taxed.
Like a Roth IRA, the contributions themselves would face a tax, but the account could be used for any reason, not just retirement, FOX Business previously reported.
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“The Universal Savings Account Act cuts through red tape and gives every American a flexible, tax-free way to save, invest and spend — without government interference or penalties,” Harshbarger said in a statement.
The funds can be used to invest, and the current version of the bill allows for an “initial contribution” of $10,000 a year and $20,000 for married couples who are American citizens or permanent residents.
Notably, the $10,000 “after-tax” contribution limit would increase $500 annually until it hits $25,000 and would then rise based on inflation.
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“Washington shouldn’t be in the business of micromanaging how people use their own money. This bill is a win for working families, a win for personal freedom and a win for financial independence,” the Tennessee lawmaker added.
Similar legislation has been introduced in recent years. However, the renewed discussion for universal savings accounts comes as tax policy details continue to be hashed out at the White House and in the halls of Congress.
“A simple and accessible incentive savings plan will provide families with a way to establish financial security and prosperity. This bill provides a straightforward solution to those challenges. I strongly urge my colleagues to pass this bill for the future generations of Americans,” Cruz said.
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There would be no income restrictions for account holders, and accounts can be opened on behalf of minors and transferred to the immediate family when an account holder dies.
Other countries such as the U.K. and Canada have universal savings accounts, according to the Tax Foundation.
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