The issue of “wealth taxes”—particularly whether investment wealth in the form of unrealized gains can be subject to current income tax liability—is swirling in Washington this month. Both the Supreme Court and Congress are confronting the issue.

Treasury and the Internal Revenue Service (IRS) continue to ratchet up pressure on employee retention tax credit (ERTC) claims that they say show evidence of fraud. That, in turn, puts pressure on ERTC claims that, while not necessarily fraudulent, may contain errors and thus attract the attention of government officials cracking down on ERTC claims.

On November 24, the Treasury Department and the IRS issued proposed regulations implementing the rules of the provision in the SECURE retirement laws that qualifies long-term (those who have worked two years or more for an employer), part-time (those who work at least 500 hours/year) employees to participate in an employer-sponsored retirement savings plan.

Congressional Republicans are fighting back against the Department of Labor’s (DOL’s) proposed rule to increase the salary threshold below which the white-collar exception to the Fair Labor Standards Act’s (FLSA’s) overtime (OT) rules would not apply.

Ideas for the emerging “SECURE 3.0” retirement savings bill—which is still early in the development phase—are beginning to proliferate. Here is a summary of some of the idea's lawmakers are considering for the next-generation retirement savings legislation.

A new poll shows that 85 percent of voters in battleground states support a federal paid leave program. And 65 percent of those polled said they would be motivated to vote based on the federal paid leave issue.

During the NCOIL Fall Meeting, an Industry Education Council (IEC) Board vote was taken to have NAIFA’s State Government Relations Manager, Bianca Alonso Weiss, serve a 2-year term. The NCOIL Life Insurance is a Promise for Life Model Act was put on hold. Committee Chair Representative Carl Anderson (S.C.) states that industry representatives had withdrawn their requests to speak as a result.

On October 31, the Department of Labor (DOL) released its new proposed fiduciary rule (which they renamed the retirement security rule). The proposal triggered immediate and intense opposition from NAIFA and from most of the retirement savings community.

Authority for federal discretionary spending expires at midnight November 17. Yesterday the House passed the legislation unveiled by GOP House leadership last Saturday, the Further Continuing Appropriations and Other Extensions Act, to fund the government’s discretionary spending beyond expiration on November 17 of its current spending authority. The vote was 336-95. Only 2 Democrats voted against it.

Bipartisan legislation to create a federal retirement savings plan has been introduced in both the House and Senate. The Retirement Savings for Americans Act (RSAA) was introduced on October 19 in the Senate by Sens. John Hickenlooper (D-CO) and Thom Tillis (R-NC). In the House, the RSAA was introduced by Reps. Terri Sewell (D-AL) and Lloyd Smucker (R-PA).

A bipartisan pair of House tax writers introduced legislation giving very small businesses (those with ten or fewer employees) a tax credit for establishing a new retirement savings plan for their workers. H.R.6007 was introduced on October 23 by Ways & Means Committee members Reps. Claudia Tenney (R-NY) and Dan Kildee (D-MI).

Laying the groundwork for more proposals to reduce or eliminate the growing economic gap between the wealthy and working American families, both the Senate Budget and Finance Committees held hearings on the wealthy’s tax liability. The Budget Committee hearing was held on November 8; the Finance Committee hearing was November 9.

In what turned into a partisan slugfest, on November 7, the House Ways & Means Committee held a hearing on the impact of the Department of Labor (DOL) rules on environmental, social and corporate governance (ESG) factors surrounding retirement plan investment choices. Generally, the committee’s GOP members slammed the permissibility of considering ESG factors in evaluating the appropriateness of certain investments for inclusion in a tax-favored retirement savings plan. By contrast, Democrats say the ESG rule is timely and appropriate in the context of retirement savings plan investment choices.

On November 1, the Internal Revenue Service (IRS) released inflation-adjusted retirement and benefits plan contribution limits for 2024. Next year, 401(k) savers will be allowed to contribute $500 more than they can in 2023.

On October 18, the Internal Revenue Service (IRS) announced its criteria for evaluating a business’ eligibility for the pandemic-era employee retention tax credit (ERTC). In their memo on how the agency will be examining still-pending ERTC claims, the IRS said that ERTC eligibility required an order from the Occupational Safety and Health Administration (OSHA) to prevent spreading COVID-19 to qualify for the credit. Reliance on guidance only would be insufficient, the IRS said.

New Speaker of the House Rep. Mike Johnson (R-LA) promised to establish a bipartisan debt commission to address growing federal debt and deficit concerns. The commission would focus on revenue (taxes), spending, and the central role of entitlement programs like Social Security, Medicare, and Medicaid. The federal debt reached $1.7 trillion in FY 2023.

On September 30, in a last-minute maneuver that pitted hard-right conservative House Republicans against the perceived disaster of a government shutdown, Congress approved a “clean” continuing resolution (CR) that will keep the federal government funded and operating until November 17. The CR also extends authorization and funding for the National Flood Insurance Program (NFIP) until November 17.

The House of Representatives is in turmoil. On October 11, Rep. Steve Scalise (R-LA) beat rival Rep. Jim Jordan (R-OH) to win his party’s nomination to be Speaker of the House by a narrow 113-99 secret vote. But Rep. Scalise withdrew from the race some 24 hours later, determining that he could not get the 217 votes needed to win on the House floor. Then, on October 13, Rep. Jordan won a GOP Conference vote to become the House GOP nominee for Speaker—but his vote total was 93 short of the 217 needed on the House floor. So, going into the evening of October 16, the House is still without a Speaker, or any prospects for one. And thus, all House business remains at a halt pending the election of a new Speaker.

On September 28, the House Ways & Means Committee approved legislation, HR 5687, that expands health savings account (HSA) rules to include an increase in the out-of-pocket costs associated with the HSA’s accompanying high deductible health plans (HDHPs). Those limits currently are $7,500 for self-only coverage, $15,000 for family coverage, and $1,000 in catch-up contribution authority. Under current law, HSA contribution limits are much lower--$3,850 for self-only HSAs and $7,750 for HSA owners with family coverage.

On September 14, the Internal Revenue Service (IRS) announced it had stopped processing all new coronavirus-era Employee Retention Tax Credit (ERTC) claims, and that claims submitted prior to September 14 will be subject to enhanced examination and considerable delay before payment of those claims it determines to be valid. The IRS actions are in light of reports of rampant fraud among those seeking to claim the ERTC.