WASHINGTON (2/12/13)--Sens. Carl Levin (D-Mich.) and Sheldon Whitehouse (D-R.I.) introduced legislation Monday that would close tax loopholes and produce more than $189 billion in deficit reduction--an amount the senators say is sufficient to significantly help avoid sequestration. The bill sticks to tax loopholes and does not address the tax status of credit unions.
The Cut Unjustified Tax Loopholes Act would close corporate and individual tax loopholes. It would, for instance, remove loopholes that allow multinational corporations to avoid taxes by transferring U.S. profits offshore; that subsidize corporations for the expense of moving U.S. jobs overseas; that subsidize stock-option grants to corporate executives; and would close the "carried interest" loophole that allows hedge fund managers to pay a lower tax rate on their income, and a loophole that subsidizes speculative trading in certain financial derivatives, the lawmakers noted in a release.
The Credit Union National Association is monitoring tax policy discussions in Washington, D.C. and meeting with lawmakers to describe the public policy reasons behind the credit union tax exemption.
Under the Federal Credit Union Act, federal and state-chartered credit unions are exempt from federal income tax because they are cooperatives operated for and by their members, and because credit union shares are essentially members' deposits. The tax status has been re-affirmed periodically by the U.S. Congress and is supported by many lawmakers.
Levin and Whitehouse were among the more than 20 recent meetings CUNA President/CEO Bill Cheney has had recently with federal lawmakers to discuss the need to protect the credit union tax status.
"CUNA has had very positive discussions about the need to protect the credit union tax status," Cheney has reported. No legislator CUNA has spoken with has suggested that the credit union tax status is currently on the table as a tax reform or spending issue. However, Cheney has emphasized, none have suggested that CUNA should be anything but vigilant on this key issue as tax reform talks move forward and all sorts of ideas are thrown into the discussions.