On July 19, 2017, the House Ways and Means Tax Policy Subcommittee held a hearing on the benefits of tax reform for individuals, which included discussion of permanence and proposals related to retirement security, and a former chairman warned against retroactive tax provisions.

Witnesses at the hearing were:

— The Honorable Bill Archer, Former Chairman, Committee on Ways and Means
— Bernard F. McKay, Chairman of the Board of Directors, Council for Electronic Revenue Communication Advancement
— Jania Stout, Practice Leader and Co-Founder, Fiduciary Plan Advisors at HighTower
— Eric Rodriguez, Vice President — Office of Research, Advocacy, and Legislation, UnidosUS

Archer focused his testimony on the importance of permanent tax policy and said as members pursue tax reform they will be up against constituencies defending current provisions. "I don't have a magic answer for you. I wish I did," he said of tax reform. "I think it's extremely complicated."

McKay said tax simplification could make compliance easier and reduce the multiplicity of current tax incentives for retirement and education. Rodriquez said the wealth divide would grow even wider under proposals by President Trump and House Republicans that include a reduced tax rate on pass-through entities and repeal of the estate tax.

Stout advocated a national retirement security clearinghouse to streamline transfers and rollovers among workplace-based retirement plans and IRAs, as well as Reps. Sam Johnson (R-TX) and Richard Neal's (D-MA) Savings Enhancement by Alleviating Leakage in 401(k) Savings (SEAL) Act that permits individuals to continue to pay plan loans if a plan is terminated or a plan participant becomes unemployed. She also expressed support for a bill introduced by Neal and others, the Retirement Security for American Workers Act (H.R. 854), that would allow two or more unrelated private employers to join a pooled employer retirement plan.

Rep. Dave Reichert (R-WA) said tax certainty would help Americans invest, grow, and hire, and asked what permanence means for the average worker. Archer said it depends on the degree to which individual taxpayers rely on special provisions in the code. He said a major failing in the 1986 Act was the fact that major changes were retroactive, which undermined the value of real estate and brought about demise of savings and loans, and cautioned members not to include retroactive provisions in tax reform.

Rep. Lloyd Doggett (D-TX) said he agreed with Archer regarding retroactive provisions. He also said there needs to be a better understanding of how retirement savings can be improved and that he is not sure what is being proposed on retirement by the House Republican Blueprint. The 2016 Blueprint said Ways and Means would work to "consolidate and reform the multiple different retirement savings provisions in the current tax code."

Doggett asked about challenges working families have in saving for retirement. Rodriguez said retirement savings are lacking for low-income Americans and current retirement plan incentives benefit those who are already saving, contributing to the nation's wealth gap and resulting in savings accruing at the top of the income scale.

Chairman Peter Roskam's (R-IL) opening statement and witness testimony from the hearing are attached.

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ATTACHMENTS

Archer statement

McKay statement

Rodriguez statement

Roskam statement

Stout statement