Okay, so the headline is a bit of a ploy in that Steven Earhart, president of NAIFA-Greater Philadelphia, hasn’t really found a “magic bullet” to stop the onslaught of state taxes aimed at death benefit payments that appear on the horizon.

But his sentiments in his most recent communication to the NAIFA-GP membership echoes a mantra I have been repeating for years: The best defense against an intrusive goverment that seeks to diminish the service and products we offer is to have a strong, vibrant agent assocation that can effectively lobby our state and federal legislators.

If you’re not a member of a local, state or national assocaition that lobbies on your behalf, then your lack of an investment might just show in the obstacles that goverment puts before you. But don’t listen to me, here are the words of Mr. Earhart:

April 28, 2009

 Dear NAIFA Member:

Many of you have heard me talk about the epic battle that was coming with tax reform. My comments e specifically referred to fighting proposed legislation that would adversely affect the benefits our products provide to our clients. 

The battle is no longer coming, it is here!

With a record deficit, challenging economy, and mounting expenses, Congress is looking for revenue. Unfortunately, many states are in a similar financial crisis and some have joined the attack on our products. It is almost a certainty that many more will mobilize against the tax benefits of our products.

Last year California introduced legislation to tax some of the tax advantages life insurance offers. NAIFA’s quick action stopped the proposal in its tracks.

This year Oregon proposed legislation (H.B. 2854) to tax life insurance death benefits and the inside build up of life insurance and annuities.

The first successful state bill that attacks our products will start a domino effect with the other states.

Our products will provide $1.5 trillion in tax benefits (tax free death benefits, tax free disability income payments, tax deferred build up of life insurance cash values) over the next five years. The Federal Government considers this “lost revenue”. Now the states do too!

A loss of any of these tax benefits would put all of our franchises at risk. Make no mistake-our industry is a target and in the eyes of the government these benefits are the low hanging fruit that can be “picked” to raise revenue.

Remember there is strength in numbers so don’t sit on the sidelines. Please consider getting involved and helping us by doing the following:

• Recruit a non-member
• Get involved- join a committee
• Contribute to IFAPAC
• Attend our meetings and bring a non-member: Annual meeting May 21, 2009 – Green Valley Country Club.
• Support our special events – Golf Tournament, June 8, 2009 – Spring Ford Country Club.

• In addition, if you have any suggestions on how to increase the value NAIFA provides to you, please give me a call (610) 660-4500.

   

  Thank you for your membership and support.

   

  Sincerely,

   

  Steven D. Earhart, CFP, MSFS, CLU, ChCF

  President