The article addresses current proposals for expanding tax-preferred individual savings accounts and their implications for retirement security and tax policy. The authors argue that the yield-exempt approach embraced by the Bush Administration in its proposals is likely to generate enormous long-term revenue losses, exacerbate inequalities in income and wealth, and erode broad-based coverage under employer-sponsored retirement plans. In addition to these fiscal and distributional concerns, they conclude that the proposals pose a serious obstacle to fundamental tax reform.
Karen C. Burke & Grayson M.P. McCouch, Lipstick, Light Beer, and Backloaded Savings Accounts, 25 Va. Tax Rev. 1101 (2006), available at http://scholarship.law.ufl.edu/facultypub/558