Jan. 22, 1997
The National Association for the Self-Employed (NASE) today lauded legislation introduced by Finance Committee Chairman William V. Roth, Jr., R-Del., and Sen. John Breaux, D-La., that would expand the availability and uses of Individual Retirement Accounts (IRAs).
"IRAs are an extremely important tool for small-business owners and the self-employed," said NASE President Bennie L. Thayer. "Without private pension plans, entrepreneurs must have additional opportunities to build retirement savings. By lifting the income cap, the legislation will encourage more business owners to use this type of investment. Furthermore, by encouraging all Americans to save, the legislation will increase the country's savings rate, which is a real boon for small business. More savings helps lower the cost of capital, and access to capital funds is one of small business' largest issues."
The Savings and Investment Act of 1997, which is cosponsored by more than 30 senators, would create a "Super IRA" -- one that is fully-deductible for all Americans, without income limits, and allows penalty-free early withdrawals if the funds are used for a first-time home purchase or for educational, unemployment or medical expenses.
"As this country begins a serious debate about the future of Social Security, enhancing other retirement options such as the IRA is vital, especially for the self-employed," Thayer said. "The self-employed are 'triple-taxed,' paying both the employer's and employee's share and then -- like other Americans -- paying taxes on the employee share, which is not deductible from federal income tax." The current Social Security rate for the self-employed is 15.3 percent.
"Small businesses are the engine that drives America's economy," Thayer concluded. "Legislative initiatives such as the Roth-Breaux bill help to keep that engine running smoothly. We applaud this effort and will work to help it become law."
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