WBA is learning from several sources that Obamacare repeal and tax reforms are the first two priorities for the Trump Administration after inauguration. This will impact bankers on many levels both personally and professionally.
We understand that soon after President-Elect Donald Trump is sworn in, there will be two Senate resolutions passed – one repealing Obamacare and one that makes targeted, narrow changes to the tax code (potentially only to individual tax rates). Then, later in the spring, a more comprehensive package largely focused on tax reform will occur. The Senate will set up reconciliation follow-on vehicles to address these issues.
Under reconciliation, the party that controls the Senate can pass legislation from a budget resolution with a simple majority instead of the 60 votes usually required. But legislation passed through this process must affect federal taxes, spending or deficits and must sunset after 10 years if it has any budgetary impact beyond a decade.
Given the potential significant landscape change that could occur with the tax code, most tax advisors will likely tell you that, as an individual or a business, you will generally come out ahead by following the approach of deferring income and accelerating deductions. Of course, effective tax planning should consider each taxpayer’s particular situation and planning goals.
Toward that end, I encourage you to strongly consider making a charitable donation to Wisconsin Bankers Foundation, which is your industry’s public charity focused on improving financial education and literacy around the state. Click here to learn more about the Foundation.
For the industry, WBA has increased its regular communications with key elected officials since the election on the need to end the tax exemption enjoyed by credit unions over $1 billion in asset size because the public policy rationale for the exemption has outlived its purpose. In a recent communication to Speaker Paul Ryan’s office, I reminded him that Wisconsin is home to 13 large credit unions and the tax advantage they enjoy is used by them to acquire tax-paying institutions, expand their commercial lending activities, sponsor professional sporting events and build luxurious headquarters. Notably, as credit unions grow, more money leaves the tax rolls which illustrates that the exemption has outlived its purpose.
WBA will continue to provide updates on these developments as they occur. Take advantage of the tax deductions available today by making a donation to the Wisconsin Bankers Foundation prior to December 31! Without question, the first 100 days of President Trump will keep us all busy on the advocacy and grassroots front!