March 4, 2026
The Honorable John R. Thune
Majority Leader
U.S. Senate
Washington, D.C. 20510
The Honorable Charles Schumer
Minority Leader
U.S. Senate
Washington, D.C. 20510
The Honorable Mike Johnson
Speaker
U.S. House of Representatives
Washington, D.C. 20515
The Honorable Hakeem Jeffries
Minority Leader
U.S. House of Representatives
Washington, D.C. 20515
RE: Generating Retirement Ownership Through Long-Term Holding (GROWTH) Act of 2025
Dear Senators and Representatives:
The undersigned organizations write to express our support for the Generating Retirement Ownership through Long-Term Holding (GROWTH) Act of 2025. The GROWTH Act, introduced by Senator John Cornyn (R-TX) (S. 1839) and Representatives Beth Van Duyne (R-TX) and Terri Sewell (D-AL) (H.R. 2089), would allow mutual fund investors to automatically reinvest capital gains distributions without paying taxes until they actually sell their funds, in line with other investment options. Under current law, investors pay taxes on mutual fund distributions every year even if their individual holdings remain invested. Enacting the GROWTH Act would benefit millions of middle-class Americans, create parity in the tax system, and incentivize further investment.
An estimated 23 million households, representing roughly 40 million Americans, hold about $7 trillion of long-term mutual fund assets in nonretirement accounts. These households are largely middle-class investors, with a median income of $140,000. Many of these households, when they’re able to find some extra money to invest, turn to the same mutual fund products they already own inside their retirement accounts. However, these savers often do not know they will be taxed annually on the distribution of gains, despite not having sold their shares, leaving them with a surprise tax bill at the end of the year. American households thus face a harmful effect twice over: first with an annual tax bill, and then by reducing the compounding of their returns over the long run, which undercuts one of the main benefits of investing.
The GROWTH Act does not exempt capital gains distributions from taxation; it simply recognizes the tax when investors sell their mutual fund shares. This change would benefit investors and simplify the tax code by giving mutual funds and exchange-traded funds the same tax treatment. At a time when middle-class Americans are facing higher costs and working harder than ever, the GROWTH Act is a common-sense change that helps people saving for their goals.
We strongly urge both chambers of Congress to help pass the GROWTH Act and improve long-term financial security for millions of Americans.
Thank you for your consideration.
Sincerely,
Investment Company Institute
American Council for Capital Formation
American Securities Association
Americans for Tax Reform
Financial Services Institute
Investment Advisor Association
SIFMA
SIFMA-AMG
U.S. Chamber of Commerce
