Taxing Credit Unions is a Tax on the Middle Class

http://justmusing.net/2009/04/08/a-question-of-play/ Taxing Credit Unions is a Tax on the Middle Class

The American Banking Association, the lobbying group for big banking is at it again. The ABA supports banker-delivered financial education, and as you can imagine, any “financial education” provided by bankers only encourages Americans to give all their money to the banks—and then borrow it back at a higher rate to “get good credit.”

This time the ABA is lobbying Washington to impose an indirect tax on the middle class via a tax on credit unions. How does this work? Good question. You may be aware that credit unions have a disadvantage in the marketplace since they cannot issue shares and raise capital like a corporate owned bank. One advantage credit unions do have over banks is that they don’t pay taxes. They don’t pay taxes because they are member-owned and not-for-profit. This makes a lot of sense.

But now with credit unions taking more profit away from the big banks, the American Bankers Association is lobbying Washington to put a tax on credit unions. And if the banks succeed, credit unions will be forced to raise interest rates on loans, reduce rates on savings, and reduce services to the 96 million Americans that use credit unions. It is important to know that the vast majority of the 96 million members are the middle class and poor. If this bill passes, this is the same as imposing a direct tax increase only on the middle class, the poor, and the many businesses that borrow from credit unions (at lower rates than banks.)

The bankers say it will help with the budget deficit. Correct me if I am wrong, but didn’t the banks cause the Great Recession while lining their pockets with trillions of dollars over the last decade making loans they knew could not be paid back, only to get a multi-billion dollar bailout at the expense of the American taxpayer? Wouldn’t the deficit be much smaller if the banks weren’t too big too fail? If you support credit unions, it is very important to forward this post to anyone you know that is a member of a credit union. They need to learn what they can do to help keep credit unions tax free. And watch this short video for more good info: