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WASHINGTON The Investment Company Institute is strongly supporting a new piece of legislation called The Growth Act, or Generating Retirement Ownership Through Long-Term Holding.
What ICI President Paul Schott Stevens likes about the plan, introduced in the U.S. House of Representatives two weeks ago by Reps. Paul Ryan (R-Wis.) and William Jefferson (D-La.), is that it would optimize the tax code for millions of Americans saving for retirement through mutual funds.
Whereas capital gains on todays mutual fund accounts are taxed every year, under The Growth Act, taxation would be deferred until the fund shares are sold.
That keeps more retirement savings invested longer and growing longer by taxing income when its withdrawn, not savings while they are being built up, Stevens said in an opening address to attendees at the ICI general membership meeting on May 11.
Modifying the tax treatment so that gains are allowed to compound for taxation...