Congress is inching closer to passing a budget reconciliation bill that will threaten the future of our movement for democratic, community-owned capital. Buried in nearly 1,000 pages of text are two tax provisions that received almost no vetting: Sections 138312 and 138314 of the Build Back Better Act will limit the ability for grassroots investors to use self-directed IRAs and related vehicles to invest their retirement funds into community capital projects. We are calling on Congress to remove Sections 138312 and 138314.

The provisions are apparently intended to curb efforts by the ultra-wealthy to shield their wealth, by prohibiting investments by self-directed IRAs in offerings that are limited to accredited investors. However, the bill would also prohibit IRA investments into community capital offerings that impose suitability standards. That includes virtually all Direct Public Offerings in many states and Regulation Crowdfunding offerings nationwide. 

For millions of Americans, nearly all of their investable assets are held in their retirement accounts. These two tax provisions would effectively forbid them from investing locally or in alignment with their values.

NC3 represents a coalition of grassroots investors and community-builders who seek to democratize financial systems. We envision a world where empowered citizen investors catalyze the growth of locally-rooted ventures creating economic opportunity for all.

We advocate for financial systems that benefit everyone, not just the ultra-wealthy. While these provisions aim to challenge the current economic regime that highly favors wealthy people, it misses the mark. 

More information on the effects of Sections 138312 and 138314 of the House Reconciliation Bill can be found here.