Capitol Hill Check-In: The Growth Act

In March 2025, Representative Beth Van Duyne (R-TX) and Representative Terri Sewell (D-AL) introduced the Generating Retirement Ownership through Long-Term Holding (“Growth”) Act (H.R. 2089). A Senate companion to the Growth Act was introduced in May 2025 by Senator John Cornyn (R-TX), it does not have a Democratic co-sponsor. Because the bills impact revenue, they were introduced in the House Ways and Means Committee and the Senate Finance Committee, the congressional tax writing committees in each chamber.

The Growth Act would allow investors in mutual funds to defer capital gains taxes on automatically reinvested mutual fund distributions until they sell their shares and realize the income. The bill aligns mutual fund taxation with that of individual stocks and ETFs, where taxes are generally only owed when the asset is sold.

The Growth Act, or similar legislative text of the bill, has been introduced in several legislative sessions over the past decade. One hurdle in its passing has been that the bill would cost the federal government money in deferred taxes. Measures that “cost money” typically face an uphill battle as they compete with other measures, particularly if there is not a budgetary offset identified. Also, due to U.S. Senate procedure, if the bill is to advance in regular order, it must have a filibuster proof coalition supporting its advancement. Ultimately, even with bipartisan support in the U.S. House of Representatives, the measure has a difficult path forward. Opportunities for advancement may include an end of the year tax package, or as part of a broader budget reconciliation package. The budget reconciliation route offers the added “perk” of requiring a simple majority in the Senate, making it easier for the bill to advance.

Click here to read the legislative text of the GROWTH Act.