House Ways and Means Committee Chairman Kevin Brady (R-TX) today (July 24, 2018) released a Tax Reform 2.0 framework that, as anticipated, focuses on three areas: making permanent individual and small business tax cuts; promoting savings for families and retirement; and spurring innovation by allowing start-ups to write off more of their initial costs.

In releasing the document, which is intended to be the basis for listening sessions with House Republicans and constituents, Chairman Brady said, "We plan to work off this framework to build on the growing successes of the Tax Cuts and Jobs Act and ensure this energized economy continues moving forward." The listening sessions are expected to last through August, and Chairman Brady said last week that he anticipates the House will vote on legislation in September.

The two-page document said that "locking in" individual and small business tax cuts, which are set to expire in 2025, would provide certainty and unleash additional economic growth.

The document said Tax Reform 2.0 includes a range of retirement proposals, without identifying them. "It is the perfect time to help local businesses provide retirement plans to their workers — and to help workers participate in those plans so their retirement years are more secure," it said. Chairman Brady previously signaled that the Retirement Enhancement and Savings Act (RESA) of 2018 (H.R. 5282), addressing issues including multiple employer plans and annuities, could ultimately be reflected in the effort, which he said could also include other retirement-related proposals advanced by House members.

In the category of "Family-Friendly Savings Plans," the framework proposes creating a new Universal Savings Account to offer a "fully flexible savings tool for families." The June 2016 House GOP tax reform blueprint said Universal Savings Accounts: "have been proposed by many people over the years as a way to eliminate the double taxation of savings and investment for families, most recently by Rep. Dave Brat of Virginia … These are accounts to which individuals could contribute cash and over which they would have full control of investment decisions. Account holders could withdraw both contributions and earnings at any time, and for any reason, without penalty."

The Tax Reform 2.0 framework also proposes allowing Section 529 plans to be used to pay for apprenticeship fees to learn a trade, cover the cost of home schooling, and help pay off student debt. Also under the framework, families would be allowed to access their retirement accounts penalty-free for expenses upon the birth or adoption of a child, and to replenish the accounts in the future.

The document said, "As part of an annual focus on encouraging innovation, Tax Reform 2.0 will help brand-new businesses write off more of their initial start-up costs, and remove barriers to growth."

The framework is prefaced by, consistent with comments made by Chairman Brady in recent months, calls to change the culture in Washington to "never again will we wait a generation to modernize our tax code," and to keep the US tax system competitive. "Tax Reform 2.0 is a new commitment to improve the tax code each and every year for American families and local businesses," the document said.

The framework is attached.

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ATTACHMENT

House GOP Listening Session Framework