Feb. 23, 2012 – NAFCU is remaining vigilant in its effort to preserve the credit union tax exemption against the backdrop of Wednesday’s release of the Obama administration’s “framework for business tax reform,” which addresses the possible elimination of certain federal tax expenditures.
The framework, produced jointly by the White House and Treasury Department, has five elements, among them the elimination of “dozens” of business tax loopholes and tax expenditures to “reduce distortions that hurt productivity and growth.” Examples of those being targeted, it states, are “last in first out” accounting, oil and gas tax preferences, insurance industry and product reform, carried interests (profits) and special depreciation rules for corporate purchases of aircraft.
“The President’s plan would start from a presumption that we should eliminate all tax expenditures for specific industries, with the few exceptions that are critical to broader growth and fairness,” the document states.
In other provisions, the framework envisions a decrease in the corporate tax rate from 35 percent to 28 percent and reduction in “harmful distortions” in the code. Part of this would be establishing “greater parity between large corporations and large non-corporate counterparts,” the administration document states.
Brad Thaler, NAFCU’s vice president of legislative affairs, said the document’s examples of targeted tax expenditures are not all-inclusive. And talk about more parity between corporate and non-corporate entities is ripe for interpretation. “We will keep making the case for preserving the credit union tax exemption as lawmakers and the administration debate tax reform,” said Thaler.