Washington, D.C. (August 23, 2000)—“Needed tax relief for small business is long overdue,” stated ICBA President Tom Sheehan. “As lawmakers return to complete their work in the final weeks of the 106th Congress, it’s critical for any tax relief plan to ease the heavy tax burden on community banks,” noted Sheehan, who is president of Grafton State Bank in Grafton, Wis.

“Congress genuinely recognizes that community banks continue to face unfair and onerous tax burdens," stated John Evans, president of D.L. Evans Bank in Burley, Idaho, and chairman of ICBA’s Tax Committee. Fortunately, lawmakers have already produced a number of bills to help community banks that the ICBA is actively supporting. The ICBA urges Senate Finance Committee Chairman Bill Roth (R-Del.) and House Ways and Means Committee Chairman Bill Archer (R-Texas), and their fellow Senate and House committee members to consider these specific items when promoting their final tax relief plans. They include:

• Expanding saving incentives. H.R. 1102, the “Comprehensive Retirement Security and Pension Reform Act,” would greatly enhance saving opportunities and help boost the nation's record-low savings rate, largely through expanding popular IRA and 401(k) plans. This would make it easier for banks to attract core saving deposits and infuse needed funds back into local communities.

• Estate tax relief. H.R. 8, the “Death Tax Elimination Act,” already passed by Congress, would phase out the punitive “death” tax over 10 years. Today, too many farms, small businesses and local banks are forced to liquidate and shut down just to pay estate taxes at the time of their owner’s death. ICBA urges President Clinton to sign this important legislation into law.

• Subchapter S expansion. Specifically, the companion bills sponsored by Sen. Allard Wayne (R-Colo.), Rep. Scott McInnis (R-Colo.) and Rep. Marge Roukema (R-N.J.)—S. 875, H.R. 1994 and H.R. 1586, respectively—and a bill introduced by Rep. Clay Shaw (R-Fla.) the "Subchapter S Revision Act," H.R. 689. These bills would help more small businesses and community banks avoid punitive, double taxation by electing S-Corporation tax status, allowing taxation only at the shareholder level.

“These simple and reasonable tax code changes would go a long way to preserve a competitive source of needed capital and credit for communities and small businesses, which are the cornerstones of our nation’s economy,” Sheehan stated. “With the non-Social Security revenue surplus set to exceed $2 trillion over the next decade, needed community bank tax relief should be an essential part of any tax-relief legislation passed this year.”

ICBA is the primary voice for the nation’s community banks, representing 5,500 institutions at nearly 16,700 locations nationwide. Community banks are independently owned and operated and are characterized by attention to customer service, lower fees and small business, agricultural and consumer lending. ICBA's members hold more than $491 billion in insured deposits, $589 billion in assets and more than $344 billion in loans for consumers, small businesses and farms. They employ nearly 232,000 citizens in the communities they serve. For more information, visit www.icba.org.

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