September 9, 2013
In a recent article titled, "Tax Exemption for Credit Unions: An Unjustifiable $10 Billion Tax Expenditure," Kenneth Kies and Bert Ely present yet another compelling case credit unions to pay federal corporate income taxes.
Kies and Ely argue that credit unions have grown to control a significant segment of the financial service market and have moved sharply away from their original mission; however, unlike their direct competitors they do not pay corporate income taxes. The authors find no policy or economic justification for the credit union tax break which has been estimated by the Office of Management and Budget (OMG) to cost nearly $10 billion over the next five years. Credit unions have evolved to become financial institutions which provide services identical to taxpaying competitors. In order to level the playing field, all credit unions should pay taxes. READ MORE.