Senator Coburn (R - OK) released a report today identifying over $900 billion in wasteful tax breaks to Washington special interests.
Among the wasteful tax breaks spotlighted in the report is the credit union industry's exemption from the federal corporate income tax.
Senator Coburn notes that "the numerous preferences in the personal and corporate tax code come at a price" ... of keeping "the standard tax rates artificially high."
According to Senator Coburn, the credit union tax exemption "will cost taxpayers $2.1 billion in FY 2014 and $11.9 billion from FY 2014 through FY 2018."
The report notes that the credit union tax exemption "distorts competition within similar institutions and has no economic justification to exist."
The report states that the tax exemption has enabled credit unions to grow at more rapidly than other depository institutions with credit union industry assets nearly doubling between 2003 and 2012.
Also, the report points out that the common bond requirement, which at one time allowed credit unions to point to their uniqueness, has been all but eviscerated and that anecdotal evidence indicates that credit unions are not fulfilling their purpose of serving people of modest means.
Go to page 116 of the report to read why Senator Coburn recommends eliminating the credit union tax exemption as a part of comprehensive tax reform.
Don't need to go to page 116.
ReplyDeleteThe exemption is no longer justified. I'd rather have acces to capital and more business lending authority.
There is no reasonable or supportable justification of this loophole.
Those of us with assets greater than $500 million or $1B should be taxed and regulated by a real regulator.
Bring it.
I'm curious, if that's truly how you feel, why not convert to a bank? What's keeping you from pursuing this option?
DeleteNCUA regulations combined with obstruction by industry insiders make the decision to convert fraught with extraordinary, unnecessary risk and cost. Despite congress intention that it not be so.
DeleteWith the end of the tax exemption let's also require credit unions to be examined by the OCC
ReplyDeleteIt's amazing how these politicians are so brave with their opinions when they're retiring. Where were these bon mots when they were in office? Coburn is another cowardly politician who steals taxpayer money and does nothing for the welfare of his constituents.
ReplyDeleteThats a good point.
DeleteAlot like Fryzel who is suddenly chatty cathy fryzel.
Guess that's another former cu regulator looking for cu business.