WASHINGTON–In what could become a potential paradox, credit unions repeatedly cited the role of credit unions in helping the finances of lower and middle-class Americans when seeking to fend off any provision revoking the CU tax exemption in the “One Big Beautiful Bill.” But that same bill, which the CU trade groups have praised, is estimated by some to be costly to those same lower-income and middle class Americans.
The Congressional Budget Office is estimating income for the bottom 10% of households would fall by 2% in 2027 and by 4% in 2033 as a result of the bill’s changes. By contrast, those in the top 10% would get an income boost from the legislation of 4% in 2027 and 2% in 2033, CBO found.
A Yale Budget Lab analysis found a similar dynamic. The bottom 20% of households — who make less than $14,000 a year — would see their annual incomes fall about $800 in 2027, on average, Yale estimates.
The legislation includes cuts to Medicaid, other medical spending, the Supplemental Nutrition Assistance Program (SNAP, Meals on Wheels, and more.
‘Quite Complex’
During a call with the media, the CU Daily asked America’s Credit Unions about the paradox presented by the legislation, with the trade group saying it is concerned about what the legislation could mean for lower-income Americans.
“The dynamics of a tax bill are quite complex and I understand there’s going to be analysis across the board from a number of legislative agencies, government agencies and independent organizations providing their feedback and analysis about the impact of this bill,” said the trade group’s CEO, Jim Nussle. “Obviously, the bill’s not done yet but yes, we are always concerned about that.
“We would also not want them to be taxed even more by taxing credit unions, which is really a tax on individuals, because they’re the owner-members of the credit union and they’re the ones that will pay the tax if credit unions are taxed,” added Nussle. “We’re going to continue to watch it. Obviously, the bill is not done yet and there will be much more analysis about the economic impact on everybody.”
