Oct. 4, 2012 – NAFCU sent separate letters Wednesday to President Barack Obama, Republican presidential nominee Mitt Romney, Treasury Secretary Timothy Geithner and nine bipartisan senators involved in deficit talks to request their support for the credit union tax exemption.
NAFCU President and CEO Fred Becker authored the letters to Obama, Romney and Geithner. In the case of Obama and Geithner, NAFCU is seeking a reaffirmation of support. The Obama administration has previously stated that it supports preserving the credit union tax exemption. In all three of his letters, Becker noted that such support “will be shared with the credit union community and the nation’s 94 million credit union members.”
Meanwhile, NAFCU Executive Vice President of Government Affairs Dan Berger expressed the importance of protecting the tax exemption in letters to Sens. Kent Conrad, D-N.D., Lamar Alexander, R-Tenn., Michael Bennet, D-Colo., Mike Johanns, R-Neb., Tom Coburn, R-Okla., Mike Crapo, R-Idaho, Dick Durbin, D- Ill., Mark Warner, D-Va., and Saxby Chambliss, R-Ga. The senators are among a "gang" of bipartisan senators that has been working to come up with a plan to address the deficit, which is widely expected to include an overhaul of the tax code.
In each letter, Berger pointed out how many jobs would be lost in the senator’s state if the credit union federal tax exemption was eliminated. He also provided a specific dollar amount estimate of what the elimination of the expenditure would mean for personal income in each senator’s state.
Both Becker and Berger included a copy of NAFCU’s commissioned study on the exemption with their letters. The study found that eliminating the exemption would, over the next decade, cost the federal government $15 billion in lost tax revenue; slow economic growth, or GDP, by $148 billion (in 2010 dollars); and result in 1.5 million lost jobs. It also showed that non-credit union members would also suffer if the exemption was taken away –– the study estimates that the total cost to bank customers of higher loan rates and lower deposit rates would be nearly $30 billion over a seven year period.
The findings confirm what numerous other studies have shown over the years – the value of the credit union tax exemption far outweighs any revenue that the government would collect from taxing credit unions.