Tax Exemption Repeal Would Cost Billions: NAFCU
Ending credit unions federal tax exemption would cost the country billions in lost revenue and jobs, according to a study commissioned by NAFCU.
The research that loss of the credit union tax exemption would cost the federal government $15 billion in lost tax revenue, $148 billion in GDP, and 1.5 million lost jobs over the next decade.
Researchers found that consumers benefited by $10 billion per year because credit unions are exempt from federal taxation and that, counter-intuitively, taxing credit unions would result in a net tax loss of $1.5 billion because of the loss in consumer income from fewer credit unions in the marketplace.
The study also found that bank customers benefit from credit unions as well because of increased competition. The cost to bank customers if there were a 50% reduction in CU market share ranges from $2.4 billion to $6.3 billion per year over the period 2005-2011 in higher loan rates and lower deposit rates.