The Tax Reform Act of 2014 (or “Camp Draft”) would impose $60 billion in new taxes on life insurance companies, products and services. It would establish an unnecessary barrier to financial and retirement security for tens of millions of American families and thousands of businesses by:
- discouraging long-term savings
- increasing the cost and reducing the availability of insurance products
- limiting employers’ ability to provide employee benefits and plans for the future
The current tax treatment of Life Insurance is appropriate. Throughout the 100 year history of the federal income tax system, gain from inside buildup has never been viewed as gross income until proceeds are actually received by the policyholder (typically through sale or surrender.) Gain on inside buildup is not taxed when held within the contract consistent with treatment of appreciation on stock or home value. If and when proceeds are actually received, ordinary income tax, not the preferential capital gains tax, is imposed.
Please take time to spread the word on this issue. Reach out to your congressman. Let them know we oppose the Tax Reform Act of 2014.