Feb. 4, 2013 – NAFCU is reading the Joint Committee on Taxation's steep cut in the estimated “cost” of the credit union federal income tax exemption as an affirmation of the association’s view that the exemption doesn’t cost but enhances federal revenues and economic growth.
Last year, the Office of Management and Budget estimated that the credit union exemption, defined as a tax expenditure, would cost the federal government some $1.16 billion in lost revenue in 2013. In the new estimate, the committee has reduced that to $500 million. It has also cut by about one-third, to $3.9 billion, the estimated cost of this exemption from 2013-2017.
NAFCU Vice President of Legislative Affairs Brad Thaler noted that in previous congressional testimony, the committee said eliminating a tax expenditure doesn’t necessarily translate into an equal number of added dollars flowing into federal coffers. And NAFCU’s landmark study of the credit union exemption shows that eliminating that exemption would not only reduce net federal revenue but lead to higher costs for all Americans.
NAFCU lobbyists are discussing the study’s findings with lawmakers and is encouraging credit unions to do the same. The study is online.