FOR IMMEDIATE RELEASE
ICBA Presses President's Tax Panel to Increase Savings
Washington, D.C. (March 28, 2005) - The Independent Community Bankers of America (ICBA) has urged the President' Advisory Panel on Federal Tax Reform to help boost the sagging U.S. savings rate. In a letter to panel Chairman Connie Mack, III and Vice Chairman John Breaux, ICBA President and CEO Camden R. Fine expressed an urgent need to boost personal savings and investment through tax reform.
"There is a genuine concern that Americans are simply not saving enough for retirement or many other important financial needs such as health care or education" said Fine. "Savings is the necessary fuel for investment that allows our nation to grow and create jobs. It's no secret that our current tax system more heavily taxes savings verses consumption-which only discourages much-needed savings and investment."
The ICBA urged the Tax Panel to embrace reforms to boost savings including:
- Embracing the ICBA-backed Retirement Savings Accounts and Lifetime Savings Accounts proposed in the FY 2006 Federal Budget and in Congress.
- Reducing the punitive double taxation on individual savings and investment by addressing the tax burden on interest, dividends, and capital gains.
- Making the pending, temporary estate tax repeal permanent.
ICBA also weighed in on the panel's request for input on aspects of the tax code that are unfair. "The dramatic tax burden differential between taxpaying community banks and competing tax-exempt credit unions highlights a prime example of where the tax code is extremely unfair" said Fine. "As the Panel seeks to improve fairness in the tax system, ICBA recommends a fresh policy evaluation of the estimated $31 billion in lost tax revenue over the next ten years from the tax-exempt credit union industry."
The ICBA delivered to the Panel two tax policy studies to help with its reform efforts. The ICBA's study, Community Bank Tax Relief and Simplification Options, conducted with Grant Thornton LLP, and Competitive Advantage: A Study of the Federal Tax Exemption for Credit Unions, produced by the Tax Foundation.
The ICBA's Tax Reform Panel comment letter and the two tax studies are available at www.icba.org.