Begich backs CU tax exemption
July 30, 2013 – Sen. Mark Begich, D-Alaska, gave his defense of existing tax expenditures – specifically highlighting the credit union federal income tax exemption – to Senate Finance Committee Chairman Max Baucus, D-Mont., and Ranking Member Orrin Hatch, R-Utah, in a letter on Friday.
Regarding the credit union federal income tax exemption, he wrote, “Alaska is far removed from traditional financial centers, and credit unions play an outsized role in our economy. That is why Section 501(c)(14), which grants tax exempt status to credit unions, should be retained in any tax reform effort, to ensure continued access to affordable credit for consumers, homebuyers, and small businesses alike, all of which contribute substantially to economic growth.”
Baucus and Hatch asked senators to give their reasons for keeping any existing tax expenditures by the end of July. Currently, Baucus and House Ways and Means Committee Chairman Dave Camp, R-Mich., are on a road trip visiting local and corporate businesses in an ongoing effort to include the American people in the tax reform discussion. Yesterday, both members stopped in New Jersey and Philadelphia where they visited family-owned business Mrs. G TV and Appliances in Lawrenceville, N.J. and The Hub Centers for Meeting and Collaboration in Philadelphia.
Despite these ongoing efforts, recent comments from Senate Majority Leader Harry Reid, D-Nev., and others show the ongoing divide in Congress over reforming the tax code and seeking to generate more revenue. Baucus announced last week that he plans for the Senate Finance Committee to mark up some version of comprehensive tax reform legislation this fall.
NAFCU has urged senators to defend the credit union federal income tax exemption. A NAFCU economic study conducted last year shows that eliminating the tax exemption would result in the loss of 150,000 jobs a year over the next decade and a net loss of revenue to the federal government. The presence of the nation’s tax-exempt credit unions benefits all U.S. consumers to the tune of about $10 billion per year.
Credit Union Federal Tax Exemption Study