Nonprofits and funders on the side of improving access to housing and financial assets for low-income people are closely watching a showdown in the Supreme Court on “disparate impact.”
When you are one, you have only just learned to speak. You move about clumsily and knock things down a lot. You don’t yet know what is possible, but you are burgeoning with life.
From the Whitehouse Press Office:
Sen. Whitehouse and Rep. Neal Introduce Retirement Savings Bill
Automatic IRA Program will Help Enhance Retirement Security for Tens of Millions
Washington, DC – Senator Sheldon Whitehouse (D-RI) and Congressman Richard E. Neal (D-MA) introduced legislation today that would dramatically enhance the retirement security of millions of Americans. According to most financial planners, the United States is at the precipice of an impending retirement crisis. Many Americans are simply not saving enough to be financially secure in retirement. It is estimated that 75 million workers have no employer-provided retirement plan or other opportunity to save through workplace contributions.
The Automatic IRA Act offers a common-sense solution to dramatically expand retirement savings in the U.S. Under the bill, tens of millions of workers would be eligible to save for retirement through a simple payroll deduction. The non-partisan Retirement Security Project has estimated the Whitehouse-Neal Auto IRA proposal could raise net national savings by nearly $8 billion annually.
“Each month, tens of millions of Americans build toward a comfortable and dignified retirement by contributing to employer-based savings plan. Unfortunately, half of American workers don’t have access to employment-based accounts and may find it much more difficult to save,” said Senator Whitehouse, a member of the Senate Budget Committee. “This bill would give those without access to a 401 (k) plan the opportunity to benefit from automatic monthly savings. Coupled with Social Security, such tax-preferred savings can help people in Rhode Island and across the country enjoy financial freedom in their golden years.”
“Getting more low and middle-income workers into the retirement savings system remains one of my top priorities. Far too many Americans are putting their retirement at risk because they do not have access to a workplace savings plan. I believe this auto-IRA bill can dramatically improve their post-employment years. By making it easier for workers to save, millions of Americans will enjoy their retirement more secure and content,” said Congressman Neal, a senior member of the House Ways and Means Committee.
The Whitehouse-Neal legislation creates automatic payroll deposit Individual Retirement Accounts, or Auto IRAs, for workers who do not have access to employer-provided qualified retirement plans. The bill would also require employers with 10 or more employees to automatically enroll workers in an Auto IRA unless the employee opts out. The employers could receive tax credits to defray the costs of setting up the accounts. We know that automatic enrollment has been extremely successful in getting more people to save for retirement. Studies have shown that participation rates are at least 10 percentage points higher in plans with automatic enrollment (77 percent) than those without it (67 percent). The GAO also found that automatic IRA enrollment could increase the number of lower-earning households with retirement savings and increase retirement income as well.
The Auto IRA proposal, which was jointly developed by Brookings Institution and Heritage Foundation scholars, has garnered widespread support, including the AARP, the U.S. Black Chamber, the Women’s Institute for a Secure Retirement, and the Aspen Institute Initiative on Financial Security.
With $3 million dollars in technical assistance and consulting from the Citi Foundation and Living Cities, three poverty-stricken U.S. cities now have more irons in the fire for improving government and building an inclusive economy.
In case you don’t know Living Cities, it was founded in 1991 and is now backed by 22 foundations and several financial institutions that partner with it “to develop and scale new approaches to dramatically improve the economic well-being of low-income people.” The big names in philanthropy are all behind this place, including Gates, Rockefeller and Ford, and big banks like Bank of America, Citi, and JP Morgan Chase are on board as well.
Living Cities has been around long enough to watch concern about urban poverty move in and out of vogue. These days it is most definitely in vogue. Not only is inequality writ large a hot issue, but there’s a huge amount of excitement about urban renewal and a number of mayors are doing interesting things to help cities create opportunity and stability for low-income people. As well, there’s a lot of energy around making city governments more innovative agents of change, which is crucial for enabling the local public sector to reduce poverty and drive economic growth. Creative programs are happening in many cities, but often in isolation.
Good news and more good news: Senator Whitehouse is looking for ways to put the middle class first, get billionaires to pay their fair share, and generate new revenues. Not for nothing, but sometimes I really wish Senator Whitehouse could have been Vice President with Obama. These are the reforms our country desperately needs. From the Whitehouse Press office:
Providence, RI – With President Obama and Republican leaders in Congress citing tax reform as a key area for bipartisan cooperation in the new year, U.S. Senator Sheldon Whitehouse (D-RI) today announced that he will introduce three bills to make the federal tax system fairer for middle-class families and small businesses. The package would end tax breaks and loopholes that benefit multi-national corporations and the highest earners, and is projected to generate over $300 billion in revenue over 10 years.
“Our tax code is riddled with giveaways and special deals for the biggest corporations and top earners, and that special treatment hurts hardworking Rhode Islanders,” said Whitehouse. “Multi-national corporations stash assets and profits abroad to avoid paying a fair share in taxes. Companies ship jobs overseas and get a tax break for doing it. And billionaires pay lower tax rates than their secretaries. These bills would help end this kind of special treatment for special interests, and generate hundreds of billions of dollars in revenue in the process.”
All three bills will be introduced tomorrow when the Senate is in session. Senator Whitehouse will fight to include these proposals in any tax reform package that moves through the Senate.
Whitehouse’s plan includes:
The Paying a Fair Share Act – The Paying a Fair Share Act would implement the “Buffett Rule,” ensuring that multi-million-dollar earners pay at least a 30 percent effective federal tax rate. The rule is named for legendary investor Warren Buffett, who has famously pointed out that he pays a lower tax rate than his secretary. The bill, which includes language to preserve the incentive for charitable giving, would generate an estimated $71 billion over ten years.
The Offshoring Prevention Act – Currently, U.S. companies that manufacture goods abroad for sale here at home are allowed to defer payment of federal income tax – waiting to pay taxes on foreign income in years that minimize their tax liability. The Offshoring Prevention Act would require companies that send factories and jobs overseas to play by the same rules as ones supporting jobs in the U.S. The bill would generate an estimated $20 billion in revenue over ten years.
The Stop Tax Haven Abuse Act – Estimates show that Fortune 500 companies hold roughly $2 trillion in offshore holdings to benefit from favorable foreign tax systems and bank secrecy. Championed in previous Congresses by retired Senator Carl Levin (D-MI), the Stop Tax Haven Abuse Act would close loopholes that allow multi-national corporations to avoid paying a fair share in taxes by moving assets and profits through intricate networks of offshore subsidiaries and bank accounts. This bill would generate at least $220 billion in revenue over ten years.
None of the bills prescribe uses for the revenue they would generate. It would be up to Congress to decide how the funds would be spent – anything from investments in infrastructure to deficit reduction.
Whitehouse has been a leader in the Senate on tax fairness issues. In addition to authoring the Buffett Rule and Offshoring Prevention legislation in previous Congresses, in 2013, he proposed a plan to replace strict austerity measures contained in the 2011 debt ceiling deal – the budget “sequester” – by closing tax loopholes that benefit the wealthiest Americans and big corporations, and he has spoken often of the injustices in our present tax code.
A rising tide lifts all boats, and a recent study shows that as the economy improves, disabled people are enjoying a bump in their employment numbers. The Kessler Foundation wants to jump on that positive wave and ride it for all it’s worth. By expanding training and employment initiatives, the foundation is looking to fund nonprofit disability organizations who want to take their strategy to the next level with more and better ways to hook disabled people up with jobs.
That’s my Bishop!
“We have gotten very good at responding to the immediate effects of poverty. But we are here to ask you, our elected leaders, to help our community, our state, deal with the underlying issues, issues that are too big for the faith community to respond to on their own,” Mr. Knisely said.