WASHINGTON – U.S. Senators Bill Cassidy, M.D. (R-LA), Chuck Grassley (R-IA), John Barrasso (R-WY), Steve Daines (R-MT), and James Lankford (R-OK) introduced a bill to protect the savings of middle-class families being crushed by historic inflation. The Middle-Class Savings and Investment Act would provide tax relief to lower- and middle-income families and retirees as inflation outpaces the growth of their savings.
“American families are having their savings wiped out by inflation, and it’s clear the Biden administration has no plan,” said Dr. Cassidy. “This legislation brings relief and security to struggling middle-class families.”
“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 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.”
“From prices at the grocery store to the gas pump, President Biden’s economy is bankrupting Montana families and making it hard to plan for the future, or even tomorrow. This bill will help give hardworking, middle class Montana families a leg up by expanding tax free investment and retirement savings and will have the added benefit of helping combat inflation,” said Senator Daines.
“Oklahomans know it’s good to save money in case of an emergency and for retirement, but Biden’s inflation and record-high, $5-per-gallon or more gasoline are overwhelming families and eating up money they try to save,” said Senator Lankford. “Our bill gives more breathing room from federal taxes on middle class families and retirees so they are able to save more when times are tough.”
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.
Click here for a full one-pager on the bill.
According to data released by the Bureau of Labor Statistics, the consumer price index (CPI) accelerated last month at the fastest rate in 40 years. The annualized CPI—a critical gauge of inflation—rose 8.6 percent for the twelve months ending in May. This massive increase in inflation amounts to a reduction in consumer purchasing power, squeezing budgets for individuals and families across the country.
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