To amend the Internal Revenue Code of 1986 to create Universal Savings Accounts.
Legislative Progress
IntroducedMrs. Harshbarger introduced the following bill; which was referred to …
Summary
What This Bill Does
This bill creates a new type of tax-advantaged savings account called Universal Savings Accounts (USAs). Unlike 401(k)s or IRAs, these accounts have no restrictions on when you can withdraw money or what you can use it for - withdrawals are completely tax-free at any age and for any purpose.
Who Benefits and How
High-income individuals benefit the most because they can contribute up to $10,000 per year initially (increasing by $500 annually up to $25,000), letting investment earnings grow and be withdrawn completely tax-free. Banks and financial services firms benefit from managing billions in new account assets as trustees. Wealthy families also gain a new tool for transferring wealth to surviving spouses tax-free upon death.
Who Bears the Burden and How
The federal government loses tax revenue because investment earnings in these accounts are never taxed - unlike regular brokerage accounts where capital gains and dividends are taxable. Middle and lower-income Americans who cannot afford to contribute receive no benefit while potentially facing higher taxes or reduced government services to offset the revenue loss.
Key Provisions
- Contributions start at $10,000/year and increase to a cap of $25,000/year (both adjusted for inflation)
- All withdrawals are tax-free regardless of age or purpose
- Accounts must be held at qualified banks or IRS-approved trustees
- Upon death, accounts transfer to surviving spouse with no tax consequences
- Excess contributions are subject to a 6% excise tax penalty
Evidence Chain:
This summary is derived from the structured analysis below. See "Detailed Analysis" for per-title beneficiaries/burden bearers with clause-level evidence links.
Primary Purpose
Creates a new tax-advantaged savings account called Universal Savings Accounts (USAs) that allows individuals to contribute up to $10,000+ annually (adjusted for inflation, capped at $25,000) with tax-free withdrawals at any time for any purpose.
Policy Domains
Legislative Strategy
"Expand tax-advantaged savings options beyond retirement accounts by creating a flexible savings vehicle with no age restrictions, no income restrictions, no withdrawal penalties, and no required use case"
Likely Beneficiaries
- High-income individuals who can maximize annual contributions and benefit from tax-free investment growth
- Financial services industry (banks, investment firms, asset managers) who will serve as trustees and manage billions in new account assets
- Wealthy families using USAs for intergenerational wealth transfer (accounts pass to surviving spouse tax-free)
Likely Burden Bearers
- Federal Treasury - revenue loss from tax-free investment earnings
- Lower-income taxpayers who cannot afford to contribute and receive no benefit from this tax preference
- Future taxpayers who may face higher taxes or reduced services to offset revenue loss
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_secretary"
- → Secretary of the Treasury
- "trustee"
- → Bank or IRS-approved custodian
- "the_secretary"
- → Secretary of the Treasury
Key Definitions
Terms defined in this bill
Contributions exceeding the annual contribution limit, subject to excise tax under section 4973
A trust created or organized in the United States for the exclusive benefit of an individual, designated as a Universal Savings Account, meeting specific requirements including: cash-only contributions, contribution limits, qualified trustee, nonforfeitable interest, and no life insurance investment
A contribution to a Universal Savings Account from another USA of the same beneficiary, made within 60 days of distribution from the original account
Starting at $10,000 in 2025, increasing by $500 per year, with cost-of-living adjustments, capped at $25,000 (also inflation-adjusted)
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology