Deficit Reduction Panel Report Calls for Elimination of CU Tax Exemption
A report that is likely to be voted on this week by a presidentially appointed commission on deficit reduction recommends eliminating business tax expenditures including the tax exemption for credit unions.
The panel doesn't mention the credit union tax exemption by name but the report released today describes these expenditures as "another name for spending through the tax code."
The recommendations, which include cuts in the Pentagon budget, raising the retirement age and modifying the mortgage interest deduction, are aimed at cutting the deficit by $4 trillion by the end of the decade.
The report concludes that the changes to tax and fiscal policy are needed because the country is "on an unsustainable fiscal path. Spending is rising and revenues are falling short, requiring the government to borrow huge sums each year to make up the difference. We face staggering deficits."
When the Treasury Department did an analysis in 2005, it estimated the annual revenue from taxing credit unions would be $1.39 billion while Congress' Joint Committee on Taxation estimated $1.30 billion. The Tax Foundation, in a study funded by the Independent Community Bankers of America, concluded during that same year that the annual revenues from such a tax could be as high as $3 billion.
The 18-member commission, whose members were appointed by President Obama and congressional leaders, is scheduled to vote on Friday.
Congressional leaders have said they will allow a vote on the recommendations if there is support for the report by 14 of the 18 commission members.