Congress should enact fair tax plan for credit unions

Ronald Reagan said: "In an economy based on free market principles, the tax system should not provide a competitive advantage for particular commercial enterprises. These arguments apply with particular force to large credit unions." (May 1985.)

The Utah Legislature and governor agreed, and in 2003 they enacted a fair tax policy for the largest credit unions. It states that Utah's multibillion-dollar credit unions should pay the same income taxes as other cooperatives on the millions in profits they retain to expand their operations.

Because of the nature of tax laws, this debate has to occur three times: first, in the state courts; second, in the state Legislature; third, in Congress. The first two of these battles have already been fought, and the large credit unions have lost each time on the merits of the issue. Their fate isn't looking any better in Congress, so they are starting to get desperate. Their only option is pure political intimidation. They use half-truths and scare tactics to try to manipulate the outcome of elections.

Frankly, everyone has had enough of the political antics of the large credit unions. Based on the past activities of credit union lobbyists, a group of legislators rightly sent a letter warning primary voters and urging them to not be swayed by last-minute attacks and instead focus on the real issues.

In response, Scott Simpson of the Utah League of Credit Unions wrote a guest editorial that appeared in this paper. He attacked and labeled the legislators who wrote to voters. He even tried to deny that credit unions were involved in the campaigns.

Specifically, Mr. Simpson wrote:

"Utah credit unions do not 'claim to have helped' any of the candidates."

This is blatantly false. A credit union news release published in the May 10 edition of The Credit Union Times stated: "In a political triumph for the Utah League of Credit Unions, a Republican gubernatorial candidate with strong support from CUs came in a surprising second in preferential balloting at the party's weekend nominating convention. . . ."

In fact, nearly every lobbyist on the credit union payroll "volunteered" their time and effort for this same candidate. They may "claim" that they did not help any candidate, but if their candidate had won, they'd be singing a different tune.

"The state credit union charter is broken."