Senator Jeff Flake – A Complex Tax System Prevents Americans From Saving

Senator Jeff Flake – A Complex Tax System Prevents Americans From Saving

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Friends,

It’s been a good week for Arizona in the U.S. Senate. We were able to pass several high-priority pieces of legislation, including a measure to address the complaints about flight path noise out of Sky Harbor, legislation to refund the state for keeping national parks open during 2013 government shutdown, and an amendment that will make it easier for Arizona to store more water during drought years.


ADDRESSING NOISE COMPLAINTS NEAR PHOENIX SKY HARBOR AIRPORT

Since the FAA altered the flight paths surrounding Phoenix Sky Harbor Airport in 2014, I’ve been hearing firsthand from Valley residents who, with no say in the process, were suddenly experiencing an intolerable increase in flight noise due to a dramatic increase in the number of overhead flights. While I recognize the importance of modernizing and improving the safety of our National Airspace System, the lack of consideration for communities that have been negatively impacted by the flight path changes is concerning.

After a long effort to advance a legislative solution, the Senate took a major step this week to address the flight path issue by approving the FAA Reauthorization Act . Included in the bill is a provision that I introduced with Senator McCain that will establish a process that will allow the FAA to retroactively review flight path changes that have negatively impacted communities. If negative impacts are found, as I expect they will be in Phoenix, the FAA will then be required to work with those communities to mitigate any disturbances. The provision also ensures that other communities are not blindsided by similar flight path changes going forward. 

During consideration of the FAA bill the Senate also unanimously approved an amendment I sponsored with Senator McCain that would require the FAA to establish an airspace management advisory committee to evaluate how the FAA engages with stakeholders on flight path and other airspace changes. 


RETURNING ARIZONA’S PAYMENTS TO FUND NATIONAL PARKS DURING 2013 GOVERNMENT SHUTDOWN Â

To me, some of the most striking images to come out the 2013 government shutdown were of families being turned away from a shuttered Grand Canyon National Park. Fortunately, Arizona and five other states stepped up and actually paid the federal government a total of $2 million to keep the national parks within their borders open while the government remained closed.

Once the shutdown was over, Congress restored all funding to federal agencies, leaving the National Park Service with an extra $2 million courtesy of those state-funded payments. When I pressed NPS about returning the funds, the Service claimed that without legislation from Congress, it had no authority to return the payments. It wasn’t long before I introduced the National Park Access Act, a bill to require NPS to return this shutdown windfall to the states.

After years of pushing to advance the bill, Sen. McCain and I were able to successfully add the National Park Access Act as an amendment to a broader energy bill approved by the Senate this past week. Hopefully, it can clear the House of Representatives and be signed into law so the federal government can finally do right by these states and return these funds.


INCREASING WATER STORAGE DURING DROUGHT YEARS

One of my top priorities in the Senate is to ensure that current and future generations of Arizonans have access to an adequate water supply. There are many moving parts to addressing the drought here in the West, including the need to modernize out-of-date federal guidance that actually limits the ability of states to take full advantage of existing dams and reservoirs.

To that end, I worked with Senator Feinstein from California to add a bipartisan amendment to the Senate energy bill that will update those rules to account for drought conditions. In the end, that provision should help Arizona and other Western states improve water management at existing dams and increase the volume of water they can store.

If you’d like to read more about my efforts to conserve Arizona’s water supply, click here for a recent article published in the Arizona Daily Star.


TAX DAY INSPIRATIONÂ

Tax Day has become an annual reminder of how complicated and overwhelming the U.S. Tax Code is. With that in mind, this year I joined Congressman Dave Brat to publish the op-ed below explaining our simple solution to prevent double-taxation so more Americans can grow their savings for retirement, college, healthcare, housing and any other purchase. You can read the op-ed below or click here to view it on the Daily Signal’s website.

A Complex Tax System Prevents Americans From Saving

By. U.S. Rep. Dave Brat and U.S Sen. Jeff Flake

The Daily Signal

April 19. 2016

Another tax day has come and passed only to once again remind us of the increasing financial burden that government places on individuals and families each year. Unfortunately, as taxes and onerous regulation continue to increase, the U.S. personal savings rate has decreased to 5.5 percent. Our savings rate was two to three times higher than that in the 1970s and 1980s, with a peak of 17 percent in 1975.

Today, many lack the recommended savings level of three to six months of income. In fact, according to a recent Federal Reserve survey, only 53 percent of adults would be able to cover an emergency expense of $400 without selling an asset or borrowing.

Part of the problem is the tax code being too complex, making it difficult for people to understand their options to invest and save for the future. A more streamlined and flexible saving account to enable and encourage savings is needed. To that end, we have introduced the Universal Savings Account Act, legislation that will empower all individuals to set aside money for all of life’s challenges and opportunities.

Similar to Roth Individual Retirement Accounts, the Universal Savings Accounts established in our bill are designed to offer tax-free earnings and distributions without the restrictions, confusion, and penalties associated with other tax-advantaged accounts. With these accounts, any American adult could save and invest up to $5,500 per year of post-tax income without being burdened by additional taxes when those investments grow.

While existing savings options are complicated and limited in their practicality, Universal Savings Accounts will be simple, flexible, and easy to use. While we anticipate that Universal Savings Accounts could a be a boon to those looking to supplement retirement or college tuition savings, these tax-free accounts could just as easily be used to help save for the medical expenses, the purchase of car or home, or other costs incurred in everyday life.

Universal Savings Accounts would have the added benefit of reducing double taxation and expanding national savings. With a growth rate of only 0.7 percent in the 4th quarter of 2015, it’s imperative Congress advance tools such as Universal Savings Accounts that incentivize both savings and investment.

Tax day should really be a reminder that there’s no better way to empower our cash-strapped middle class than to allow Americans to keep and save more their hard-earned wages. Making Universal Savings Accounts a reality is a great way to jumpstart that effort.

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Thanks for taking the time to read my update. As always, I encourage to share your thoughts on these or any other issues important to you on my website at flake.senate.gov.

Best,
Jeff


 

Senator Jeff Flake
413 Senate Russell Office Building Washington, D.C. 20510

Phone: 202-224-4521
Fax: 202-228-0515

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