Jan 01 1991

Taxation of Credit Unions


Burger and Lypny analyze the public policy implications of imposing a tax on the net income of credit unions. The historical basis and challenges to the tax exemption are reviewed and estimates of the projected tax revenue from taxing credit unions are presented.

The monograph discusses the effects of taxation on credit union members’ incentives taking into account the differences between the mutual, not-for-profit organizational structure of credit unions and those organizations owned by shareholders and operated on a profit basis. Canadian credit unions, which have been subject to taxation since the early 1970s, are studied as a “real world” example of credit unions’ response to taxation. Special attention is paid to the background of taxation of credit unions in Canada, the structure of the tax, and the influence of changes in other social, legal, and economic factors on the behavior of Canadian credit unions.

Albert E. Burger,
University of Wisconsin-Madison
Gregory M. Lypny
Concordia University, Montreal, Canada.
Report Number 1