Tax Conversation About to Get “Real” in the U.S. Senate

The U.S. Senate took another profound step towards enacting comprehensive tax reform this week when Senate Finance Committee Chairman Max Baucus and Ranking Member Orrin Hatch sent a letter to their colleagues announcing their intent to begin crafting a bill. Baucus and Hatch requested that Senators submit legislative language and proposals for which tax expenditures should be included in the future tax code as well as their suggestions for what to repeal or reform.  The letter reiterates that they are starting with a “blank slate – that is a tax code without all of the special provisions in the form of exclusions, deductions and credits and other preferences that some refer to as ‘tax expenditures’.”  

The Baucus/Hatch letter continues, “To make sure that we clear out all the unproductive provisions and simplify in tax reform, we plan to operate from an assumption that all special provisions are out unless there is clear evidence that they: (1) help grow the economy, (2) make the tax code fairer, or (3) effectively promote other important policy objectives.”  The letter is available here.

The timetable for gathering suggestions is short; proposals from Senators are due to the committee by July 26th.  The letter states that the committee hopes to release legislation in September, with a goal to enact it by the end of the year.

“This action by the Senate Finance Committee leadership confirms their commitment to producing comprehensive tax reform legislation this year,” said Jennifer Wagner, vice president of legislative advocacy for the Northwest Credit Union Association (NWCUA).  “Their decision to use a ‘blank slate’ format confirms the need for credit unions to let their voices be heard. Regardless of whether the Senate produces a bill that can become law within this aggressive timeline, we expect them to produce something. It will be significantly more difficult to add the credit union tax exemption into a proposal after it’s been released, than to do our due diligence now to ensure whatever is released supports our exemption.”

Northwest credit unions are rolling out internal and external campaigns to support the Don’t Tax My Credit Union campaign. To date, Oregon Community Credit Union in Eugene is leading the charge, having produced over 1800 contacts to Congress in the last few weeks. In Washington, Red Canoe Credit Union leads the pack with 497 contacts—the rapid result of just one email “ask” to members, Red Canoe marketers reported.  

“Keep up the good work,” said Wagner. “This effort must continue through the summer and into the fall as the Senate and House craft their respective bills. Find a way your credit union can support this effort.  The risk of doing nothing is too great.”

Posted in Around the NW, NWCUA.