Credit union advocacy group and banking counterpart unsurprisingly at odds over study on tax revenue.
Someone—it’s not clear who—once used the term “lies, damn lies and statistics” to describe how numbers can be used, and misused, to bolster arguments.
For years, credit union trade groups and their banking counterparts have thrown around huge numbers to demonstrate the impact credit unions have on tax revenue. For banks, credit unions cost the federal, state and local governments billions because they do not pay income taxes. Conversely, credit union officials contend that they pay a variety of other taxes and add billions to the economy as a result of lower interest rates and fees.
Welcome to the latest chapter in this decades-old fight.
The Credit Union National Association (CUNA) has produced a study using data from the Census Bureau, the Bureau of Labor Statistics and the Bureau of Economic Analysis to estimate the economic impact of credit unions. The study also relies on data from CUNA itself and the National Credit Union Administration.
What the CUNA Study Revealed
As might be expected, the association found credit unions and their employees pay a variety of taxes, and additionally that credit unions have a hugely beneficial impact on the economy.
In the study, CUNA reports that in 2021:
–Credit unions and their employees paid almost $6.1 billion in direct federal taxes, such as personal income taxes. They paid an additional $1.9 billion in state and local taxes.
–Credit unions generated more than $5.1 billion in indirect federal taxes through the contracting of third parties and such items as office supplies. They generated almost $2.8 billion in state and local taxes for such purchases.
–Almost $1.6 billion in additional federal taxes came from consumers spending in the local economy as a result of better interest rates and lower fees at credit unions. More than $1.2 billion in state taxes were paid by consumers.
The Opposition From Banking Groups
And as might be expected, the American Bankers Association (ABA) tells a much different story.
The ABA operates a website, Reform Credit Unions, that concentrates on how much money is lost as a result of the credit union income tax exemption. The site uses federal government estimates showing that by 2031, the federal government will lose $24 billion in lost tax revenue as a result of the credit union tax exemption.
“American taxpayers are stuck with the bill,” the ABA flatly declares.