The National Association of Variable Annuities may have found a sponsor for its proposal that would award tax breaks to annuity distributions.
Last week, Senator Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, told a NAVA audience in Boston that he wanted to give tax breaks to Americans who werent eligible to get the full amount of President Bushs 2001 refunds.
In light of the recession and recent terrorist attacks, Conrad a well-known deficit hawk -- said the government should spend more on infrastructure, defense and security. He also said he favored tax breaks on various insurance products to encourage savings.
NAVA spokeswoman Deb Tucker said she was unsure about whether Conrad was referring to the associations proposal. Conrad didnt return calls for this report.
When distributions begin, NAVA wants the government to tax any capital gains from an annuity with a lifetime annuity payout at the capital-gains rate not as ordinary income as the law currently stands.
"It would mean that there is increased incentive for people to save for retirement to opt for this lifetime annuitization because their money lasts longer because theyre paying less taxes." Tucker said. "They have an option to supplement Social Security."