Sports naming rights deals — like Golden1 Credit Union’s $120 million deal for the arena of the NBA’s Sacramento Kings — are just one sign that credit unions no longer need any federal tax subsidy, a respected tax analyst said today. Scott Hodge — president of the nonpartisan Tax Foundation — wrote in a Real Clear Markets op-ed that with banks’ effective tax rates lowered by the recent tax bill, credit unions have even less of a case to remain untaxed.
“Credit unions were becoming anachronisms before the enactment of the [tax bill], but that status should be declared official now that the tax gap between banks and credit unions has effectively been closed,” Hodge wrote. “If they are going to act like banks and subsidize sports stadiums like banks, it is time that they paid taxes like banks.”
He also effectively rebutted credit union lobbyists’ arguments that taxing credit unions would cause losses of income tax revenue. “Such studies amount to one-sided accounting, ignoring the fiscal costs of the taxpayer subsidies to credit unions and the economic impact that their tax-advantaged competition has on taxpaying for-profit banks,” he wrote. “And, how is it that repealing the tax subsidy that is already costing the federal treasury some $36 billion over the next decade could ‘cost’ the federal government $38 billion? That makes no sense.”