Universal Savings Account Proposal Reintroduced

Senator Ted Cruz (R-TX) and Representative Diana Harshbarger (R-TN) have introduced the Universal Savings Account Act, bicameral legislation to provide tax-advantaged savings vehicles with unrestricted use of funds—allowing participants to save, invest, and withdraw funds for any reason. According to a press release, the bill would do the following.

•    Establish an initial $10,000 contribution limit to Universal Savings Accounts, increasing by $500 every year, before capping at $25,000.
•    Allow contributions without limits based on income.
•    Allow distributions from Universal Savings Accounts that would not be subject to income tax, nor included in gross income.