Criticism of
Credit Union Tax Exemption
There are almost 300 credit unions in America with more than $1 billion in assets each. There is no reason these monster financial institutions should enjoy the same tax-free status as soup kitchens, Goodwill and disaster relief charities."
Yael Ossowski
Deputy Director
Consumer Choice Center
Credit unions were originally given tax-exempt status so that they would service lower-income individuals, because banks were not doing so. The situation has now changed, and the tax law should change with it. As Congress proceeds with tax reform, members should consider uprooting this outdated exemption."
Diana Furchgott-Roth
Senior Fellow
Manhattan Institute
To see the most blatant example of one special interest receiving preferential treatment through the tax code, lawmakers need look no further than the ridiculous charity status that allows big credit unions to make millions of dollars without paying a dime in taxes."
Josh Daniels
Policy Adviser
Libertas Institute
The first thing Congress and the president should do if they're serious about fairness is to stop picking winners and losers in the marketplace using the tax code. An obvious example of this troubling practice is the unreasonable tax advantage credit unions have over banks."
Lynee Breyer
Arizona Freedom Alliance
As society becomes networked in new ways, 1930s-era definitions cease to hold their original meanings. Regulators and industries aiming to grow can manipulate these concepts."
Aaron Klein
Brookings Institution
Repealing the credit union exemption wouldn't be as politically charged as eliminating the mortgage interest deduction, but it's an example of how distortions can get built into the code, such that they create favored industries that then latch onto their preference and will do everything possible to keep it."
Scott Hodge
Tax Foundation
It's simply not right to expect businesses struggling to make ends meet pay their taxes, while allowing wealthy credit unions to avoid income taxes entirely. Congress should examine whether the unlimited tax exemption for credit unions makes sense in all situations, or whether tax reform provides an opportunity for common sense updates."
Drew Johnson
Senior Scholar
Taxpayers Protection Alliance
Congress could review the tax exemption currently provided to all credit unions, bearing in mind there are now 281 credit unions that hold over $1 billion in assets or more and increasingly are competing in a head-to-head manner with traditional banks."
Brandon Arnold
Executive VP
National Taxpayers Union