Mon, Jul 31, 2017
Members of Congress and the administration released a statement on tax reform Thursday, in which the credit union tax status was not addressed. This follows a broad outline of tax reform released by Treasury Secretary Steven Mnuchin in April.
“The presence of not-for-profit, member-owned financial cooperatives brings numerous benefits to both members and consumers as a whole, and CUNA, leagues and credit unions are prepared to vigorously defend it, should the need arise,” said CUNA President/CEO Jim Nussle. “As the administration and Congress continue their work on tax reform, CUNA will continue its engagement to protect the credit union tax status and ensure policymakers are aware of the credit union difference as committees and staff work to add more detail to the framework.
Specifically, CUNA believes the credit union tax status should be preserved because:
- The tax treatment for credit unions continues to serve the purpose for which it was conveyed;
- The tax status represents good public policy, because it causes the creation of substantial benefits to the public, far in excess of its cost; and,
- Taxing credit unions would represent a tax increase on 110 million Americans—taxpayers who paid a total of $1.2 trillion in taxes in 2014--and would likely lead to the elimination of many, if not most, credit unions.
The statement released July 27 is the work of the so called "Group of Six," Mnuchin, Director of the National Economic Council Gary Cohn, Senate Majority Leader Mitch McConnell (R-Ky.), House Speaker Paul Ryan (R-Wis.), Senate Finance Committee Chairman Orrin Hatch (R-Utah), and House Ways and Means Chairman Kevin Brady (R-Texas).
The statement is important because for the first time in decades, the White House, Senate and House leadership, and the congressional tax writing committees have agreed to general set of principles that will allow Congressional tax writers to proceed to crafting a detailed plan to overhaul the tax code and spur economic growth.
The statement also affirms that this legislation will be crafted through "regular order." This means that there will be a robust hearing and markup process, no midnight deals written behind closed doors.