To the Editor:
Next year, Illinois voters will be asked whether we should amend Illinois’ constitution and change our flat income tax to a graduated income tax rate. Illinois taxpayers should consider whether now is the time to also end the antiquated income tax exemption for credit unions in Illinois.
Credit unions have evolved from their original mission and today compete directly with tax-paying community banks by offering the exact same financial products and services. While credit unions originally were created to serve people with common bonds and modest means, the industry has capitalized on its tax exemption to evolve into a $1.4 trillion industry nationally with a $46.4 billion footprint in Illinois.
Most consumers do not know the difference between a credit union and a bank, yet it is likely they would be less than thrilled to know they are paying more in taxes than an entire multibillion-dollar industry. While Illinois credit unions pay $0 in state or federal income taxes, the average family of four in Illinois pays almost $9,000 in federal income taxes and more than $3,000 in state income taxes each and every year. This is just not right.
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A major step in the right direction would be to tax the largest credit unions that tower over the majority of banks in Illinois. All working families in Illinois would benefit by ending the tax-free ride of Illinois’ largest credit unions.
Council for Sound Tax Policy