Saving Incentives: What May Work, What May Not (CRS Report for Congress)
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| Release Date |
Revised June 10, 2011 |
| Report Number |
RL33482 |
| Report Type |
Report |
| Authors |
Thomas L. Hungerford, Specialist in Public Finance |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
The government offers tax incentives to individuals and families to save. The empirical evidenceon the relationship of tax incentives to the saving rate mostly comes from examinations oftraditional individual retirement accounts (IRAs) and 401(k) plans. The reported results aremixed, but generally indicate small effects. Be that as it may, the tax incentives tend to benefithigher-income individuals and families to a much greater extent than lower-income individualsand families. The primary reasons are (1) higher-income individuals are much more likely tosave, and (2) higher-income individuals face higher marginal tax rates and benefit more fromsheltering income from taxation.
