IT’S ALMOST AS IF THE GOVERNMENT WANTS MOST PEOPLE TO BE IN DEBT AND DEPENDENT: A Complex Tax System Prevents Americans From Saving.

Unfortunately, as taxes and onerous regulation continue to increase, the U.S. personal savings rate has decreased to 5.5 percent. Our savings rate was two to three times higher than that in the 1970s and 1980s, with a peak of 17 percent in 1975.

Today, many lack the recommended savings level of three to six months of income. In fact, according to a recent Federal Reserve survey, only 53 percent of adults would be able to cover an emergency expense of $400 without selling an asset or borrowing.

Part of the problem is the tax code being too complex, making it difficult for people to understand their options to invest and save for the future. A more streamlined and flexible saving account to enable and encourage savings is needed. To that end, we have introduced the Universal Savings Account Act, legislation that will empower all individuals to set aside money for all of life’s challenges and opportunities.

Similar to Roth Individual Retirement Accounts, the Universal Savings Accounts established in our bill are designed to offer tax-free earnings and distributions without the restrictions, confusion, and penalties associated with other tax-advantaged accounts. With these accounts, any American adult could save and invest up to $5,500 per year of post-tax income without being burdened by additional taxes when those investments grow.

Or we could just abolish the Income Tax, and replace it with consumption taxes.