WASHINGTON – Today, U.S. Senator John Barrasso (R-Wyo.), joined Senators Chuck Grassley (R-IA), Steve Daines (R-MT), and James Lankford (R-OK) in introducing legislation to provide relief and protections for middle-class savings. These savings are still facing federal taxes despite significantly diminished value imposed by historic rates of inflation.
The Middle-Class Savings and Investment Act will help American families, retirees, ranchers and farmers as inflation outpaces any interest earned or gains accrued by their savings through targeted tax relief.
“The reckless policies of the Biden administration have led to 40-year high inflation that is eating away at the savings of middle-class families, retirees, ranchers and farmers,” said Senator Barrasso. “Historically high gas prices, food prices, and housing costs are emptying the wallets of people in Wyoming and across the country. The Middle-Class Savings and Investment Act helps Americans combat inflation by keeping Uncle Sam out of their pockets.”
“The reckless spending, backwards energy policy and overall economic mismanagement of this administration has led to 40-year high inflation. Unlike other plans, like gas tax rebates or increased taxes on businesses, our legislation will not further fan the fires of inflation,” said Senator Grassley. “Middle class families, retirees, small businesses and farmers have watched as their savings erode in value while still facing taxes on gains that may not even keep pace with inflation. This creates a perverse incentive to spend now rather than save, further fueling inflation. Our bill will ensure that those hurting most from inflation aren’t further burdened by those taxes.”
The Middle-Class Savings and Investment Act would target relief for Americans by:
- Excluding a reasonable amount of interest income from being subject to tax ($600 for married couples, $300 for individuals);
- More than doubling the size of the zero percent (lowest) tax bracket for long-term capital gains and qualified dividends, and indexing the income thresholds to inflation;
- Eliminating the marriage penalty that exists in the current Net Investment Tax—which subjects some income to an additional 3.8 percent tax—and indexing its income threshold to inflation;
- Increasing the maximum ‘savers credit’ an individual may receive for contributing to qualified retirement accounts and expanding the availability of this credit to more taxpayers.
Full text of the legislation can be found here.