Treasury Secretary Snow Endorses Savings Account Plans

by Mike Godfrey, Tax-News.com, New York

17 November 2003

Celebrating the clear signs of economic recovery in the US, Treasury Secretary John Snow addressed the Tax Foundation last week, saying that the President’s Jobs and Growth Act "clearly provided the boost the economy needed to get back on track".

"The President’s plan" said Mr Snow, "also increased bonus depreciation and quadrupled the expensing limit for small businesses, encouraging business investment. Dividend tax relief had a positive effect on the markets. In fact, equity prices have climbed about 30 percent since mid-March, improving financing conditions for businesses, and adding to household net worth."

Listing six key planks of the administration's continuing plan to revitalize the economy, the Secretary highlighted two tax-related measures, one being the streamlining of regulations and needless paperwork requirements that 'reduce business productivity and deter growth', and one being a push to 'make tax relief permanent, so businesses and families alike can plan for the future with confidence'.

"The complexities of tax law compliance are among the toughest regulatory burdens in our economy. I can’t think of any other kind of paperwork that puts a greater crimp in job creation than the many thousand page brick of the tax code and the productive resources that are wasted on complying with its rules. In other words, excessive taxes reduce investment in our economy, but so do the excessive burdens of complying with those tax laws."

Secretary Snow confirmed that the administration meant to simplify retirement savings rules, reiterating the President's proposal for two simple accounts – retirement savings accounts and lifetime savings accounts – "that will make saving for everyday life and retirement security easier and more attractive". The original proposals envisaged creating two new savings accounts that would replace individual retirement accounts (IRAs) for new savings. They would allow individuals to save up to $7,500 a year and withdraw the money without paying tax.

"We’re looking forward to working with the Tax Foundation to continue to get smart tax policies enacted", ended Mr Snow. "Thanks again for keeping American taxpayers educated about the tax laws and their government. We appreciate your support."

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