According to the December 5 Fiscal Fact, "[i]f lawmakers decide that new revenues must be part of any long-term effort to solve the budget crisis, they must choose the least harmful way of raising new revenues or else they risk compounding the crisis by slowing economic growth."
The Tax Foundation wrote:
"As a second-best option to asset sales, require Government Sponsored Enterprises (GSEs) and federally-owned businesses to pay federal income taxes. TVA, for example, has operating revenues of $11 billion and $47 billion in assets. It should pay federal income taxes. The tax benefit to credit unions has been estimated at $2 billion to $3 billion per year."
Elsewhere in the report the Tax Foundation stated:
"#4 Tax certain non-taxed business activities: There are a number of non-taxed businesses or industries that compete directly with private businesses but have the advantage of not paying federal income taxes. These include: credit unions; rural electric coops; nonprofit hospitals; and certain types of insurance firms. These businesses should be taxed as any for-profit enterprise."
The report also notes that if Congress looks to broaden the tax base, it should look to eliminate industry subsidies, targeted tax preferences, and refundable credits first, including the special exemption for credit unions.
Tax Foundation briefing paper.
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