ICI urges Congress to Pass Tax Reform for Middle-Class
WASHINGTON, Feb. 10, 2026 /PRNewswire/ — Today the Investment Company Institute (ICI) called on Congressional leadership to pass the bipartisan Generating Retirement Ownership Through Long-Term Holding (GROWTH) Act, a bill allowing investors to defer taxation of automatically reinvested capital gains distributions until they sell their fund shares. Investors could see up to $1,340 more in returns over a ten-year period on a $10,000 equity mutual fund investment.
“The GROWTH Act would allow Main Street investors to keep more of their own money, incentivize them to keep investing, and make the tax system fairer to around 40 million middle-class Americans. These families rely on investments in mutual funds to save for a house, pay for their children’s education, and ensure they have enough money in their senior years,” said ICI President and CEO Eric Pan. “We strongly urge both chambers of Congress to pass the GROWTH Act and improve long-term financial security for millions of Americans.”
Background:
- Around 40 million Americans hold $7 trillion of long-term mutual fund assets in taxable brokerage accounts.
- These households are middle class, with a median income of $140,000.
- An investor who made an initial $10,000 investment in an actively managed US equity mutual fund in 2015 and sold the shares in 2024 would have had up to $1,340 more in return after paying all taxes if the GROWTH Act’s tax deferral had been in effect.
- The GROWTH Act does not exempt capital gains from taxation, it simply delays the taxation until the investor sells the shares—under this scenario, that investor would also pay an additional $140 in capital gains taxes.
- This makes the taxation of mutual funds consistent with the taxation of other assets, where most capital gains taxes are not levied until an investor sells and actually realizes the gains.
Read the letter ICI sent to Congressional leadership today here.
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SOURCE Investment Company Institute
