The industry is loudly protesting the proposed $90 billion levy. But the amount is a pittance, says Bloomberg BusinessWeek columnist Chris Farrell
The keening from the banking industry in response to the Obama Administration's proposal to levy a special $90 billion tax on the largest banks is almost touching. It's unfair. It's punitive. It's vindictive. Worst of all, banks won't pay the fee anyway. Their customers will.
"Using tax policy to punish people is a bad idea," said JPMorgan Chase (JPM) Chief Executive Jamie Dimon in remarks after a Financial Crisis Inquiry Commission hearing in Washington earlier in the week. "All businesses tend to pass their costs on to customers."
What is it that has bankers upset? The Administration wants to charge banks a fee that is expected to raise some $90 billion over 10 years. (The two biggest U.S. banks, Bank of America [BAC] and JPMorgan, will be on the hook for $1.5 billion each, according to a report by Wisco Research analyst Sean Ryan.) The money will go toward defraying the cost of the $700 billion Troubled Asset Relief Program (TARP), which used taxpayer money to prop up a tottering U.S. banking system at the height of the financial crisis. The tax calculation limits the impact of the fee to larger banks, and it's designed to create an incentive for banks to stay smaller and keep their leverage in check.
"It's not unfair to say that these big institutions that have benefited one way or another have got to carry part of that burden," said Paul Volcker, the former Federal Reserve chairman and Obama Administration adviser in a recent talk before the Economic Club of New York.
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4 comments:
Obama just can't resist tinkering with things he knows nothing about.
He keeps trying to micromanage the country and the economy to all of our peril.
All he's doing is pandering to his base of uneducated uneployable government dependents.
Obama is becoming quite the joke!
in all fairness the banks don't have any problem charging fees!
just paying them! All those years when the government was blasting the oil companies for obscene profits nobody spoke up about the banks obscene profits, which by the way were more than the oil companies profits. And remember this, at least with the oil companies you actually got something for your money! lmao!
Check out what thr FED made this past year.
Get ready folks, your personal checking fees are about to double. Thanks Obamy, for this double wammy.
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