Canadian CUs make case to counter ‘Warren Buffett Effect’
Report offers four suggestions to close tax gap that favors big banks.
Smaller Canadian credit unions pay up to a 20% higher effective tax rate than the nation’s “Big Six” banks as a result of a combination of outdated regulations and recent policy decisions, concludes a new analysis from the Canadian Credit Union Association.
CCUA’s VP/Government Relations Michael Hatch compares the tax policy and procedural issues that tip the scales in the favor of big banks to Warren Buffett’s observation that he pays a lower tax rate than his secretary.
“Bigger institutions have the resources to invest into figuring out how to lower their taxes,” Hatch says. “And the elimination of the federal tax deduction several years ago resulted in a higher tax burden for credit unions, which means less money left over at the end of the day to invest in the business and return to members. Ultimately, it compromises their sustainability and ability to compete with the large banks.”
The “Credit Union Tax Policy Modernization” report offers four recommendations to close the “tax gap” as federal finance officials work to finalize a proposed budget due out in the next few weeks:
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