The banking lobby has drawn what it hopes is a powerful sword in its crusade against an increase in the member business lending cap: taxes.
The Independent Community Bankers of America asked Congressional Budget Office and Joint Committee on Taxation leaders to calculate how S. 2231, if passed, would reduce bank tax bills.
In a letter from ICBA President/CEO Camden Fine to CBO Director Douglas Elmendorf and JCT Chief of Staff Thomas Barthold, Fine said increasing the MBL cap from 12.25% to 27.5% of assets is "often misrepresented by some as a 'cost-free' means of expanding small business credit."
Fine referenced 2010 CBO estimates for S. 2919, a similar MBL bill. According to the letter, the CBO estimated the revenue impact at $354 million from 2010 to 2020. However, the calculations were based on the assumption that S. 2919 would have shifted assets from for-profit banks to not-for-profit credit unions.
Supporters of S. 2231 have said banks are failing to meet current business borrowing demand, but banks counter their own surveys say otherwise.
Fine called the tax-exempt status of credit unions "a very serious policy issue in view of our nation's alarming debt load and unsustainable annual federal budget deficits." He quoted a Tax Foundation study that placed a $31 billion, 10-year price tag on credit union tax exempt status.
The letter was also sent to House Ways & Means Chairman Dave Camp (R-Mich.), Ranking Member Sander M. Levin (D-Mich.), Senate Finance Committee Chairman Max Baucus (D-Mt.) and Ranking Member Orrin G. Hatch (R-Utah).
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