NAFCU to House Committee: Subchapter S Bank Tax Break Larger Than CU Exemption
Dan Berger, executive vice president, government affairs for the trade, refuted “desperate arguments the banking trades have fabricated in an attempt to extend congressional oversight hearings to credit unions” in a letter submitted Tuesday to subcommittee Chairman Charles Boustany Jr. (R-La.) and Ranking Member John Lewis (D-Ga.).
Berger countered that the estimated $2.05 billion in tax breaks granted to banks in 2010 that qualified for federal tax exemption under Subchapter S is greater than the $1.27 billion credit union tax expenditure in 2010.
“Perhaps the real issue should be the unfair advantage over credit unions that our nation’s banks get with their Subchapter S tax breaks and multiple bailouts,” Berger wrote.
“Given the fact that there are still tax-exempt Subchapter S banks that still haven’t paid back millions in taxpayer funded TARP funds, perhaps the Subcommittee should examine the Subchapter S issue further,” his letter said.
Berger also evoked a new ally of credit unions – conservative Tea Party groups – in his argument for the value of tax-free credit unions.
“While banks argue for the elimination of the credit union federal tax exemption, even the Americans for Tax Reform has said that, ‘…any tax imposed on credit unions would have a direct impact on Americans’ pocketbooks’,” he said.
Removing the credit union tax exemption would have a disastrous impact on working-class Americans, especially those who are unable to obtain credit from profit making mega-banks and those struggling to regain economic footing after the most devastating financial meltdown since the Great Depression, Berger concluded.
The House hearing Wednesday morning did not include any scheduled financial institution witnesses; instead, representatives from universities and hospitals were asked to answer oversight committee questions.