Ways & Means Working Groups Initiate Tax Reform Research
The House Ways and Means Committee has announced the chairs and vice chairs who will lead 11 working groups to research tax reform.
According to a committee release, each group of lawmakers will review current law and then collect and compile feedback from stakeholders, academics and think tanks, practitioners and House colleagues.
The Joint Committee on Taxation will compile the research into a report for the full committee and present it on this coming tax day, April 15.
Lobbyist John McKechnie, partner at Washington-based strategy and communication firm Total Spectrum, told Credit Union Times two working groups are on the credit union radar: one that will research charitable/exempt organizations, and one that will focus on financial services.
The exempt organization group will be led by Chairman David Reichert (R-Wash.) and Vice Chairman John Lewis (D-Ga.).
McKechnie said the leadership for both groups is known to leagues and national trade associations, and by and large, credit unions can work with them. He added that no committee staffers have said they are targeting credit unions; however, they haven’t called out any groups so far.
“They’re just repeating what have been saying for a year: they’re just looking at taking a holistic approach to tax reform,” McKechnie said. “The difference is now they’re putting it on paper.
Subchapter S banks do not pay federal income taxes but instead “pass through” profits or losses to shareholders, who report the income or loss on their own individual tax returns. A CUNA issue summary reports that almost one-third of all U.S. banks – some 2,376 institutions – have elected Subchapter S tax status.
“This is clearly an opportunity to point out the amount of revenue banks aren’t contributing through Subchapter S,” McKechnie said.
He added that when credit union executives visit their elected officials during CUNA’s Governmental Affairs Conference the week of Feb. 25, they should be forthright about the value of credit union tax exemption and its benefit to consumers.
McKechnie said Hill discussions should find a “sweet spot” of touting the benefits of tax exemption without drawing unneeded attention to credit unions during the tax reform process.
“We shouldn’t be afraid to discuss it,” he said. “If we try to update our services to members, banks threaten us with taxation. But if we don’t, they’ll do it anyway. And we should also be confident about the fact that we should be able to update and modernize how we serve our members. That’s simply the evolving nature of our economy.”