June 16, 2026
The Honorable Beth Van Duyne
1725 Longworth House Office Building
Washington, DC 20515
The Honorable Terri Sewell
1035 Longworth House Office Building
Washington, DC 20515
Dear Representatives Van Duyne and Sewell,
On behalf of National Taxpayers Union, the nation’s oldest taxpayer advocacy organization, I write to express our strong support for H.R. 2089, the Generating Retirement Ownership through Long-Term Holding (GROWTH) Act. This measure would allow mutual fund investors to defer paying taxes on automatically reinvested capital gains distributions, in line with other investment options such as exchange-traded funds (ETFs). By removing penalties for retail investors who hold mutual funds, this bipartisan legislation simplifies the tax code and empowers savers to build generational wealth.
Mutual funds remain a critical investment vehicle for American savers. Over 71 million households invest in mutual funds, and middle-class families in particular increasingly depend on these financial products to build wealth. As of 2025, 57% of middle-class households now hold mutual funds, compared to 43% in 2005.
Unfortunately, investors who own mutual funds outside of tax-preferred accounts face an annual tax penalty that doesn’t apply to similar investment options. Mutual funds distribute realized capital gains to investors every year. However, even if investors decide to automatically reinvest those gains back into the fund without taking any cash, they still incur taxes on these distributions. In contrast, investors who hold ETFs generally incur capital gains taxes only when they sell their shares.
This disparate treatment doesn’t just make the tax code more complicated—it actively penalizes savers who use mutual funds by limiting their ability to maximize compound returns. By allowing mutual fund investors to defer their capital gains taxes until they exit the fund or sell their investment, the GROWTH Act represents a commonsense, good-government measure that incentivizes long-term saving. NTU is proud to support this legislation and looks forward to working with you to help it become law.
Sincerely,
Alexander Ciccone
Policy and Government Affairs Manager
National Taxpayers Union