CUNA Recommends Interest Income Tax Break

WASHINGTON-In a letter to key federal lawmakers last week, CUNA President and CEO Dan Mica recommended that any economic stimulus package passed by Congress should include a limited tax exclusion for individual interest income. “Allowing the exclusion of both dividends received and interest income from taxation would encourage additional savings and investment through traditional deposit and fixed income instruments in a significant way,” Mica wrote in similar letters to Senate Finance Committee Chairman Charles Grassley (R-Iowa), Finance Committee Ranking Member Max Baucus (D-Mont.), House Ways and Means Committee Chairman Bill Thomas (R-Calif.), and Ways and Means Committee Ranking Member Charles Rangel (D-N.Y.). Mica also pointed out that tax laws used to provide an exclusion for a portion of interest and dividends for individual taxpayers prior to the Tax Reform Act of 1986. “CUNA would enthusiastically support reinstatement and an increase in the amount of this exclusion as it would promote economic growth by increasing savings and investment while putting additional dollars in the hands of consumers,” Mica wrote. “Providing an individual exemption for a portion of both interest and dividends also would ensure that all Americans have the flexibility to invest in interest- or dividend-generating savings and investment options.”