FOR IMMEDIATE RELEASE
ICBA: Congress Must Pass “Tax Extenders”
Washington, D.C. (November 18, 2010)-The Independent Community Bankers of America (ICBA) today repeated its ongoing call for Congress to extend current tax rates and expiring tax measures before the end of the year. Congress must act quickly to prevent detrimental tax hikes on community banks and their small business customers.
"Congress cannot let the clock run out and must ensure community banks and other small businesses won't face a tax increase given our fragile economy," said Jim MacPhee, ICBA chairman and CEO of Kalamazoo County State Bank, Kalamazoo, Mich. "Extending these critical tax measures before they expire will provide tax certainty and allow community banks and other small businesses to better support job growth and greater economic activity."
In recent letters to Congress, ICBA listed some of the most important tax issues pending before Congress, such as extending current income tax rates across the board, the current capital gains and dividend tax rates, and the five-year net-operating-loss carryback.
The vast majority of small businesses pay their taxes at the individual income tax level. This includes limited liability corporations, partnerships, sole proprietorships and 4.5 million Subchapter S corporations. Notably, more than 2,300 community banks-one-third of all banks-are Subchapter S corporations that are taxed at the individual income tax level. Tax levels do have consequences because small businesses typically reinvest sizable amounts of their after-tax income back into the business to support and grow the business and hire employees.
"Much-needed private capital investment in businesses and community banks is influenced by the capital gains and dividend tax rates and the expected rate of return on these investments," ICBA President and CEO Cam Fine said. "Many community banks continue to seek additional private capital in a difficult capital market environment to expand their lending and keep the credit flowing in our economy."
ICBA looks forward to continuing its work with Congress to ensure these urgent tax concerns are quickly addressed.
For more information and to read ICBA's letters to Congress, visit http://www.icba.org/.