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Wis. bankers mischaracterize tax report says league
PEWAUKEE, Wis. (9/2/10)--The Wisconsin Bankers Association (WBA) is mischaracterizing an advisory panel's report on possible tax law revisions by focusing on one option mentioned, according to the Wisconsin Credit Union League. After the President's Economic and Recovery Board (PERAB)--an outside advisory panel that is not part of the Obama administration--released Monday a report listing possible options to consider for tax reform, WBA issued a press release urging the elimination of credit unions' corporate tax exemption. (To access the release, use the link.) The 118-page report lists the exemption among a number of options. "There they go again," said Brett Thompson, president/CEO of the Wisconsin Credit Union League. "WBA is blatantly mischaracterizing information to suit its own anti-consumer agenda." He noted the report, "which is by an independent panel not tied to government despite its use of the term 'presidential' in its name, merely states a list of options the government could pursue to reform tax law." WBA failed to mention the report "has at least six mentions of Subchapter S arrangements--arrangements often used by banks to reduce their tax obligation," Thompson said. "While banks have forever wished to heap more taxes on the already tax-burdened residents of Wisconsin who own credit unions, no one who sets public policy has ever deemed that a good move--and for good reason," he said. "I don't believe for a second that the President or Congress wants to raise taxes on 92 million Americans in this manner considering the current economic climate." When the PERAB report was released, the Credit Union National Association (CUNA) sent a letter PERAB board members to underscore the public-policy value of the federal credit union tax status. CUNA President/CEO Bill Cheney immediately and adamantly defended the credit union tax exemption, explaining that the strong public-policy reasons that first inspired that tax status remain valid today. "It may be the case that not all tax preferences have lived up to expectations, but the credit union tax exemption is one of the highest-yielding investments the federal government has made," Cheney wrote. CUNA figures show that America's 92 million credit union members receive substantial benefits in the form of better pricing on services, saving them about $7.5 billion a year. The savings to consumers is especially significant when measured against the $1.5 billion in potential revenue a year that the government says is represented by the credit union tax exemption. "The tax exemption helps to ensure consumers have choices beyond commercial banks in the financial marketplace. It is appropriate to view these results not as an economic distortion," Cheney said, referring to the report's own language, "but as evidence of sound public policy." "CUNA will continue our strongest efforts to ensure that policymakers understand the purpose and effects of the credit union tax exemption," Cheney concluded, offering to meet and discuss points raised in his letter. The letter was sent also to representatives of the U.S. Treasury Department and White House, as well as to congressional leaders and National Credit Union Administration Chairman Debbie Matz.
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