Oct. 11, 2012 – Today marks the third consecutive day that a bipartisan group of senators will meet to iron out details of a deficit-reduction package, and NAFCU is continuing to urge lawmakers to protect credit unions’ federal income tax exemption as part of any effort to reform the tax code.
Known informally as the “Gang of Eight,” the group includes the original “Gang of Six” that convened last year –– Sens. Saxby Chambliss, R-Ga., Budget Committee Chair Kent Conrad, D-N.D., Tom Coburn, R-Okla., Mike Crapo, R-Idaho, Majority Whip Dick Durbin, D-Ill., and Mark Warner, D-Va. –– as well as Sens. Michael Bennet, D-Co., and Mike Johanns, R-Neb.
On Oct. 3, NAFCU Executive Vice President of Government Affairs Dan Berger wrote separate letters to those lawmakers, as well as Sen. Lamar Alexander, R-Tenn., about the importance of preserving the exemption. Alexander serves on the Appropriations committee.
In each letter, Berger noted how many jobs would be lost in the senator’s state if the credit union federal tax exemption is eliminated. He also provided a specific dollar amount estimate of what the loss of personal income would be in each senator’s state.
The same day, NAFCU President and CEO Fred Becker pressed a similar message in letters to President Barack Obama, Republican presidential nominee Mitt Romney and Treasury Secretary Timothy Geithner. The Obama administration has previously expressed its support for preserving the exemption. NAFCU is seeking a reaffirmation of that support.
All the letters included a copy of NAFCU’s commissioned study on credit unions’ federal tax exemption. The study found that eliminating the exemption would, over the next decade, cost the federal government $15 billion in lost tax revenue; slow economic growth by $148 billion (in 2010 dollars); and result in a loss of 1.5 million jobs. It also showed that bank customers would face higher loan rates and lower deposit rates as a result.
In a speech Tuesday at the National Press Club in Washington, Sen. Charles E. Schumer, D-N.Y., pointed out that all tax expenditures aren’t “loopholes” and he urged against lowering tax rates in exchange for eliminating certain expenditures.
NAFCU will also be playing close attention to tonight’s debate between Vice President Joe Biden and Republican vice presidential nominee Paul Ryan for any discussion of issues impacting credit unions. The first debate between President Barack Obama and Republican presidential nominee Mitt Romney, which took place last Wednesday, reaffirmed that both candidates intend to reform the current tax code.