Infrastructure Savings Account (ISA)
By Rob Stehlin MBA June 6, 2017
Efficiency and resilience are two areas facing American homeowners. How our communities connect and how we look to save the planet are in the news daily. The problem we face today is how do we transition our current base of 100 million inefficient homes to ones that are more energy efficient, earth friendly and water efficient while being able to resist chronic stresses and extreme shocks? All transitions cost money and we are a nation that is already 20 Trillion in debt. Our current administration has committed to infrastructure spending, but is limited by a budget that is burdened with debt. An alternative way to fund infrastructure projects, with zero impact, is to create a financial instrument that incentive’s consumers to save (tax free) and spend the savings on the modernization of personal infrastructure (home: water, energy & waste)
The establishment of Infrastructure Savings Accounts (ISA’s) is the solution. Congress could pass a law allowing for the establishment of infrastructure specific savings accounts that would be specific to certain expenses just like health savings accounts. If just 30% of homeowners participated by contributing a max amount of approx $7500, Americans would have 225 billion dollars annually to invest in home infrastructure creating demand for building materials, manufacturing and create jobs in multiple areas while lowering our CO2 emissions and saving our limited water resources.
By law, ISAs would be available to all homeowners and are not a dependent on someone else’s Federal tax return. The credited amount could be different depending on the size of the dwelling. Limits could range from $5,000 to upwards of $10,000 (or more) per year depending on size. Homeowners would have the option to make variable tax–free contributions to one’s account, so long as total contributions do not exceed the limits established by law. The funds in your ISA can be used to pay for ones homeowner’s deductible and/or “qualified” infrastructure* expenses that do not count towards your deductible.
Features of an ISA would include:
- Your own ISA contributions are tax–deductible. Your own ISA contributions are either tax–deductible or pre–tax (if made by payroll deduction). Would be modeled after IRS Publication 969 (external link) (PDF file).
- Interest earned on your account would be tax–free
- Withdrawals for qualified infrastructure expenses (external link to Health savings accounts as example) are tax–free
- Unused funds and interest are carried over, without limit, from year to year.
- You own the HSA and it is yours to keep — even when you change plans or retire
- Your HSA is administered by a trustee/custodian
The time is now. Join our movement to bring about this legislation quickly. Contact your congressional representative and encourage them to support the establishment of Infrastructure Savings Accounts. If you have a relationship with specific representatives, please feel free to contact me at Rob@abeachin.com as we will be looking for bill sponsors and could use all the help we can get in order to get this program rolling through congress.
*To be modeled after list similar to Health Savings account to include: Energy, Water, Sewage, Structural, and Efficiency expenses.