The Effectiveness of Tax-Preferred Savings Vehicles
in Promoting Saving and Retirement Security
American Council for Capital Formation
February 2003
(PDF)
In light of the President’s recent proposal to consolidate and expand
a number of existing tax-favored savings accounts, the American Council
for Capital Formation presents the following Special Report to promote
discussion and debate on the impact of such plans on household saving
and U.S. economic growth.
Since the early 1980s the U.S. personal saving rate has declined dramatically.
Given the importance of saving for investment, growth, and the retirement
security of American households, many economists and policymakers view
this trend as cause for concern. In fact, the Bush Administration recently
announced a proposal to consolidate and expand a variety of existing tax-preferred
saving plans into three new accounts. Elements of the proposal will reduce
complexity, encourage personal saving, and enhance the retirement security
of all Americans. While there has been considerable debate over the effectiveness
of tax-preferred savings accounts, there is a growing body of research
that suggests that such plans increase personal saving and improve the
financial outlook of Americans at retirement.
Read
the Full Report (PDF)
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