WASHINGTON – U.S. Senator John Cornyn (R-TX) today introduced the Generate Retirement Ownership Through Long-Term Holding (GROWTH) Act, which would help Americans save for their futures and accumulate wealth by deferring capital gains taxes on growth in mutual funds. Congresswoman Beth Van Duyne (TX-24) is the Republican lead on this legislation in the U.S. House of Representatives.

“Deferring taxes on reinvested mutual fund capital gains distributions until the investor sells their shares is a no-brainer and would help provide parity with other investment options,” said Sen. Cornyn. “This bill would empower hardworking Texans to let their money work longer, build toward personal savings and retirement goals, and create generational wealth.”

“I am glad to support the bipartisan and bicameral GROWTH Act to ensure working Americans have the freedom to invest as they desire to achieve their financial goals,” said Rep. Van Duyne. “This common-sense bill allows families to embrace American exceptionalism by giving them the freedom to invest in their future and secure their American Dream while working to achieve financial security and generational wealth.”

Congresswoman Terri Sewell (AL-07) also led the legislation in the House of Representatives.

Background:

Under current law, mutual funds distribute realized capital gains to shareholders each year—whether paid in cash or reinvested—and shareholders incur taxes on these distributions even if they are fully reinvested and the investor does not receive them. The Generate Retirement Ownership Through Long-Term Holding (GROWTH) Act would allow investors in mutual funds to be treated the same as those investing in the stock market by only paying taxes when shares are sold. 

This legislation is supported by the Investment Company Institute (ICI), which represents the asset management industry in service of individual investors. ICI’s members include mutual funds, exchange-traded funds (ETFs), closed-end funds, and unit investment trusts (UITs) in the U.S. Other supporters include the Chamber of Commerce and Americans for Tax Reform (ATR).