Sen. Cruz, Rep. Harshbarger Introduce USA Act
WASHINGTON, D.C. – U.S. Sen. Ted Cruz (R-Texas) introduced the Universal Savings Account Act, a bill that allows American families to save without the restrictions and penalties associated with traditional tax advantaged accounts.
Sen. Cruz said, “A simple and accessible incentive savings plan will provide families with a way to establish financial security and prosperity. This bill provides a straightforward solution to those challenges. I strongly urge my colleagues to pass this bill for the future generations of Americans.”
Companion legislation was introduced in the House by Rep. Diana Harshbarger (R-Tenn.-1).
Rep. Harshbarger said, “It’s an honor to partner with Senator Cruz on this commonsense legislation to empower Americans to take control of their financial futures. The Universal Savings Account Act cuts through red tape and gives every American a flexible, tax-free way to save, invest, and spend — without government interference or penalties. Washington shouldn’t be in the business of micromanaging how people use their own money. This bill is a win for working families, a win for personal freedom, and a win for financial independence."
Read the full text of the bill here.
BACKGROUND
Universal saving accounts (USAs) are tax-advantaged savings vehicles with unrestricted use of funds, allowing participants to save, invest, and withdraw funds for any reason.
This bill would allow the following:
- Distributions from Universal Savings Accounts are not subject to income tax, nor included in gross income.
- An initial contribution limit of $10,000, which increases by $500 every year, before capping at $25,000.
- No contribution limits based on income.
Experts have found Universal Savings Accounts would boost savings for low-income households, allowing them to better withstand economic shocks, such as pandemics and recessions, and plan for major expenses, such as an expanded family, education, and housing needs.
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