Jumpstart Savings Act
Summary
The Jumpstart Savings Act aims to amend the Internal Revenue Code of 1986 by establishing 'Jumpstart Programs'. These programs are designed to allow individuals to save for apprenticeship and trade occupation training expenses. The bill introduces a new section, 529B, to the Internal Revenue Code, providing tax-exempt status to Jumpstart Programs.
Expected Effects
The Act will likely increase participation in apprenticeship and trade programs by providing a tax-advantaged savings mechanism. It also allows rollovers from existing qualified tuition programs (529 plans) into Jumpstart Programs. This could lead to a shift in how individuals save for post-secondary education, with more emphasis on vocational training.
Potential Benefits
- Encourages saving for vocational training and apprenticeships.
- Provides tax advantages for contributions and distributions related to qualified trade expenses.
- Expands the options for using 529 savings plans by allowing rollovers into Jumpstart Programs.
- Potentially increases the skilled workforce by making vocational training more accessible.
- Could lead to economic growth by supporting trades and apprenticeships.
Potential Disadvantages
- May complicate the existing landscape of tax-advantaged savings accounts.
- Could disproportionately benefit individuals in states that establish and maintain Jumpstart Programs.
- Potential administrative burden for states and the IRS in establishing and overseeing these programs.
- The effectiveness depends on the specific rules and regulations implemented by each state.
- May not benefit individuals who do not pursue apprenticeship or trade occupations.
Constitutional Alignment
The bill aligns with the Constitution's general welfare clause (Preamble) by promoting education and workforce development. Congress has the power to lay and collect taxes (Article I, Section 8) and to make laws necessary and proper for carrying into execution the powers vested by the Constitution. The establishment of tax-advantaged savings programs falls under this purview.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).