Jolt
Friday Jolt: Bank Loophole Revenue Not as Much as Believed
Liberals who have been calling on the legislature to abandon an all-cuts solution to the budget by adding revenue into the mix—specifically by canceling corporate tax breaks—have been hyping one tax break in particular
, a B&O exemption for banks on interest earned off first-time homebuyers' mortgage loans.
And as we reported earlier this week, the citizen commission on tax preferences added some urgency to the lefty cause by concurring with a legislative report that recommended reviewing the $172.6 million break.[pullquote]If you kept the preference in place for community banks and only repealed the break for big banks, it would only bring in $41 million.[/pullquote]
But for today's Jolt—not so much a winner or loser, but a shocker— here's the cruel irony that could deflate the potency of the big bad bank example. Thanks to the recession, the mortgage business has been crummy—and that $172.6 million (a nice chunk of change to wave around) has been downgraded.
In a new analysis of tax preferences done by the state's Department of Revenue in the wake of the devastating September revenue forecast, repealing the bank deduction would bring in $72 million less for the state ($100 million). And if you kept the preference in place for community banks and only repealed the break for big banks, it would only bring in $41 million.
Forty one million dollars is $41 million, but as a rallying cry in a $2 billion crisis, it's not the cause celebre many think it is.
And as we reported earlier this week, the citizen commission on tax preferences added some urgency to the lefty cause by concurring with a legislative report that recommended reviewing the $172.6 million break.[pullquote]If you kept the preference in place for community banks and only repealed the break for big banks, it would only bring in $41 million.[/pullquote]
But for today's Jolt—not so much a winner or loser, but a shocker— here's the cruel irony that could deflate the potency of the big bad bank example. Thanks to the recession, the mortgage business has been crummy—and that $172.6 million (a nice chunk of change to wave around) has been downgraded.
In a new analysis of tax preferences done by the state's Department of Revenue in the wake of the devastating September revenue forecast, repealing the bank deduction would bring in $72 million less for the state ($100 million). And if you kept the preference in place for community banks and only repealed the break for big banks, it would only bring in $41 million.
Forty one million dollars is $41 million, but as a rallying cry in a $2 billion crisis, it's not the cause celebre many think it is.
