The Independent Community Bankers of America aren’t taking a holiday break from attempts to repeal the credit union tax exemption, sending an email to all Capitol Hill offices on Monday pushing the agenda.
The message, sent from ICBA Administrative Assistant Alison Sampson with the subject line, “Credit Union Subsidy Costs Taxpayers Billions,” cited H.R. 6474, a bill that mistakenly included credit unions with other tax reforms. The bill helped “reignite the controversy over the credit union tax subsidy,” the ICBA said.
The email also sourced a Tax Foundation estimate that valued credit union tax exemption at more than $30 billion over 10 years.
“Lending by tax-exempt credit unions displaces lending by taxpaying banks, thereby reducing tax revenue to the government and increasing the deficit,” the ICBA said. “At a time when the federal budget deficit is over $16 trillion, we cannot allow the American taxpayer to subsidize credit unions.”
NAFCU Vice President of Legislative Affairs Brad Thaler said he’s not surprised by the Thanksgiving week pitch from the ICBA, saying lame duck fiscal cliff negotiations between the White House and Congress could “lock in parameters for tax reform” in 2013.
Thaler said his team responded to the email, contacting members of Congress and sharing with them NAFCU’s own tax exemption study that concluded tax revenue would decrease, not increase, if credit unions were taxed.
Thaler said he thinks lawmakers on Capitol Hill have found the NAFCU study credible. He also said credit union lobbyists are also reminding legislators that banks accepted billions of dollars in TARP funds – which many community banks have not been able to repay – and that nearly one-third of banks have tax-exempt Subchapter S charters.
CUNA’s Executive Vice President of Government Affairs John Magill said the ICBA is pressing tax exemption because they’re losing the battle on member business lending legislation.
“If they really thought they were winning the MBL argument on the Hill, they wouldn’t be talking about tax exemption,” Magill said, adding, “when they’ve lost the policy argument they change the subject.”
Magill agreed with Thaler’s position that fiscal cliff issues are spurring tax reform talk, and said of the ICBA, “Anytime they see an opening they’ll try to throw some mud at us.”
Magill said CUNA did not respond to the email, because the trade is busy preparing for a Hike the Hill event pushing member business lending the following week.
“We’ll be responding when our participants fly in next week. And believe me, they’ll hear a very loud and clear response,” he said.