WASHINGTON — After reading a report in the Washington Post of a press conference held by President George W. Bush recently, NAFCU President/CEO Fred Becker decided that writing the Treasury Secretary and the IRS Commissioner was not enough.
According to a transcript, President Bush said during a White House press conference that if the tax code makes American businesses less competitive "we need to address the competitive imbalance in our tax code."
He continued, "I also made it clear that we're at the very early stages of discussion and that in my own judgment, anything that would be submitted to Congress–if submitted at all–would have to be revenue neutral. And therefore, what we'd really be talking about is a simplification of a very complex tax code that might be able to lower rates and at the same time simplify the code, which is like shorthand for certain deductions would be taken away–in other words, certain tax preferences in the code…
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"However, I would readily concede to you this is a difficult issue because the reason there is tax preferences in the first place are there are powerful interests that have worked to get the preference in the code…
"But I do think it's in the interests to constantly evaluate our competitive advantages and disadvantages. And what [Treasury Secretary] Hank Paulson told me was that there's a lot of folks who really believe the tax code creates a competitive disadvantage and therefore it's certainly worth looking at."
In response, Becker sent a letter straight to the president reminding him of his past commitments in support of the tax-exempt status of credit unions. In an Aug. 9 letter to President Bush, he outlined the gist of the Treasury Conference of Business Taxation and Global Competitiveness. He added, "While NAFCU supports making the American economy more competitive on a global scale, repealing the credit unions' tax exemption would be equivalent to a tax increase on the 89 million Americans here at home who are credit union members."
He reminded the president of his campaign promises to support the tax-exempt status of credit unions and a Treasury official reaffirmed this position as recently as last September at NAFCU's Congressional Caucus. "During both the 2000 and 2004 campaigns you wrote to NAFCU expressing your full support in maintaining the credit union tax exempt status, stating 'By increasing lending opportunities to small business, families, and workers, credit unions are contributing to our economic recovery and increasing opportunities in our communities. I strongly support the tax exempt status of credit unions, and will continue to highlight the important contributions that credit unions make to our financial system.' We greatly appreciated those words back then and our nation's 89 million credit union members hope those words continue to ring true today," Becker wrote.
He added, "The inclusion of the credit union tax exemption in the Department of Treasury's background report runs counter to the Administration's expressed policy stance for the last seven years of your administration. Accordingly, NAFCU respectfully requests that you clarify the record and continue to support the 89 million American members of our Nation's credit unions."
As previously reported, Treasury has said the report is just that and no decisions have been made. Becker copied Paulson on the letter as well.
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