March 17, 2014

Republicans concerned about Camp's bank tax

March 18, 2014 – Republicans last week expressed concerns about a bank tax included in House Ways and Means Chairman Dave Camp's tax reform draft, which would affect the 10 largest banks and total $86 billion over 10 years.

In a letter to Camp, R-Mich., sent Friday, Rep. Patrick McHenry, R-N.C., chairman of the House Financial Services Subcommittee on Oversight and Investigations, and 53 other House Republicans said they worried this proposed tax "would undermine lending and curb economic growth," according to The Wall Street Journal. This proposal would be a quarterly tax on financial firms with assets greater than $500 billion.

In response to the letter, House Ways and Means spokeswoman Sarah Swineheart, quoted by the WSJ, said, "The provision was included in order to protect taxpayers from being on the hook to bailout certain banks that have been designated ‘too big to fail' and are receiving a massive taxpayer-funded subsidy. Considering that the banking industry takes very few credits and deductions, they are some of the biggest winners of a rate reduction."

House Republicans were also concerned that this proposed tax could cause U.S. financial institutions to relocate their operations to other nations since the tax would exempt assets of foreign banks with activities in the U.S.

NAFCU thanked Camp for ensuring that the credit union tax exemption was not targeted in his discussion draft when he released it last month. NAFCU holds preservation of the credit union tax exemption as its highest priority and will continue to track developments on tax reform for any potential impact on credit unions.