The Senate budget reconciliation deal announced this week by Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) excludes several proposed tax provisions strongly opposed by ICBA.
Announced Deal: The surprise deal—which is supported by President Joe Biden and could reach the Senate floor as soon as next week—includes no tax increases that would directly target community banks after ICBA recently weighed in against several provisions that have been under consideration.
ICBA on Record: In a recent letter to congressional leaders, ICBA said it continues to strongly oppose:
A 3.8% net investment income tax on active Subchapter S shareholders.
Any new requirements that financial institutions transfer customer financial data to the IRS.
Any increase in the taxation of capital gains or individual tax rates, including a new surtax.
Any cap or phaseout of the Section 199A deduction for shareholders in Sub S community banks and other pass-through small businesses.
Tax Provisions: None of these proposals are included in the draft deal, which under reconciliation rules could pass the Senate with a majority vote. Instead, the deal would:
Institute a 15% minimum tax on corporations with profits exceeding $1 billion.
Close the “carried interest loophole,” which allows the income of investment managers to be taxed as capital gains at 20%.
Background: ICBA last year successfully pushed back against several harmful tax proposals as part of its #KeepMyBankingPrivate campaign before the spending bill Congress was then considering stalled in the Senate.
Next: ICBA will continue to closely monitor the debate and strongly oppose any efforts to resurrect tax policies that would harm community banks and the customers and communities they serve.