Committees will be appointed to develop and draft legislation that is expected to move through the committees this fall, followed by consideration on the House and Senate floors. In a joint statement, the Congressional Republicans, including Reps. Paul Ryan
(R-WI) and Kevin Brady (R-TX), Sens. Mitch McConnell (R-KY) and Orrin Hatch (R-UT), along with Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn, said the tax reform principles have the support of President Trump.
“Above all, the mission of the committees is to protect American jobs and make taxes simpler, fairer, and lower for hard-working American families,” they said in a statement. “We have always been in agreement that tax relief for American families should be at the heart of our plan. We also believe there should be a lower tax rate for small businesses so they can compete with larger ones, and lower rates for all American businesses so they can compete with foreign ones. The goal is a plan that reduces tax rates as much as possible, allows unprecedented capital expensing, places a priority on permanence, and creates a system that encourages American companies to bring back jobs and profits trapped overseas.”
Further, the reform plans do not include a border adjustment tax.
“And we are now confident that, without transitioning to a new domestic consumption-based tax system, there is a viable approach for ensuring a level playing field between American and foreign companies and workers, while protecting American jobs and the U.S. tax base,” the legislators said. “While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform.”
An area that was not addressed was the tax status of credit unions.
The Credit Union National Association (CUNA) believes the credit union tax status should be preserved because the tax treatment for credit unions continues to serve the purpose for which it was conveyed. Further, the tax status represents good public policy, because it causes the creation of benefits to the public in excess of its cost, CUNA President and CEO Jim Nussle said.
Nussle said taxing credit unions would represent a tax increase on 110 million Americans and would likely lead to the elimination of many, if not most, credit unions.
“The presence of not-for-profit, member-owned financial cooperatives brings numerous benefits to both members and consumers as a whole, and CUNA, leagues and credit unions are prepared to vigorously defend it, should the need arise,” Nussle said. “As the administration and Congress continue their work on tax reform, CUNA will continue its engagement to protect the credit union tax status and ensure policymakers are aware of the credit union difference as committees and staff work to add more detail to the framework.”