WASHINGTON, DC - Today, House Ways & Means Committee Chairman Richard E. Neal (D-MA) and Senate Finance Committee Chairman Ron Wyden (D-OR) released new data requested from the Joint Committee on Taxation (JCT) on the prevalence of mega-IRA accounts.
The data provides an update to a 2014 Government Accountability Office (GAO) report requested by Wyden. The GAO report, which used 2011 tax data, showed nearly 8,000 taxpayers had aggregate IRA account balances of $5 million or more.
The new JCT data show a threefold increase in IRA accounts with account balances of $5 million of more. As of the 2019 tax year, nearly 25,000 taxpayers had aggregate IRA account balances of $5 million or more, and 497 taxpayers have aggregate IRA account balances of $25 million or more. The average aggregate account balance for these 497 taxpayers was more than $150 million.
“These data indicate that the exploitation of IRAs is a growing problem," said Chairman Neal. “IRAs are intended to help Americans achieve long-term financial security, not to enable those who already have extraordinary wealth to avoid paying their fair share in taxes and deepen existing inequalities in our nation. The Ways and Means Committee is already looking at strategies to ensure that this retirement savings tool isn’t misused as a tax shelter for folks at the very top."
“It shocking, but not surprising, to see how the use of mega-IRA accounts by mega-millionaires and billionaires has exploded," said Chairman Wyden. “IRAs were designed to provide retirement security to middle-class families, not allow the super wealthy to avoid paying taxes. This is the perfect example of what I’ve long called the tale of two tax codes in America. On the one hand, you have 100 million Americans with no retirement savings. On the other hand, you have just 497 Americans with more than $25 million in mega-IRA accounts. As we continue to develop proposals to make the tax code more fair, closing these loopholes will be a top priority."
