Eliminating credit unions’ federal income tax exemption would generate $2 billion a year in revenue and reduce the U.S. corporate tax rate by 0.2 percent, according to a policy paper and related corporate tax reform calculator released by the Committee for a Responsible Federal Budget, a bipartisan policy group focused on federal budget and fiscal issues.
The paper reviewed several reforms that could lower the U.S. corporate tax rate, which is the highest in the developed world.
“Within the tax corporate tax code, there are a number of narrowly focused provisions which benefit only one or a few industries. Though some of these tax expenditures may have important justifications, they can also lead to an unequal playing field where the government is picking winners and losers,” the paper said.
“Examples include various tax preferences for extractive industries like oil and gas, the exemption of credit union income, the low-income housing credit which subsidizes housing construction, and the Blue Cross/Blue Shield deduction.”
Read the report.
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Credit unions will give up its corporate tax exemptions at the same time that banks give up theirs in the form of Subchapter S corporations. Fair is fair.
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