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steamboat1

Bank Tax?

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Some questions about the administration's bank tax plan.

  1. Does the administration seriously think this tax is a good idea, or is it all political positioning? The flow of comments from the administration on record and on background strongly suggest the latter.

  2. TARP losses are now projected at $120 billion. If that projection is correct, about 75% of the taxpayer contribution will be recouped. How much of the remaining loss is attributable to banks, and how much to expected losses on the aid extended to GM, Chrysler and AIG? 1/4? If so or anywhere near it, why is the tax to fall on banks only? Why not on auto companies too? Auto suppliers? Residents of Michigan?

  3. Who got the biggest windfall out of the mortgage boom? If I had to guess, people who sold homes in 2005 and 2006 and then redirected the money out of real estate. Their individual gains may be small, but collectively very large. Should anything be clawed back specifically from them? Why not?

  4. Wasn't the whole point and purpose of the administration's actions in 2009 (and the Bush administration's actions in 2008) to restore profitability to the banks by any means necessary? Didn't the administration consciously and knowingly reject policies such as direct investment in the banks that would have enabled the government to share in the proceeds if profitability were restored? In other words, they got the result they wanted. Why complain?

  5. Why is the non-bank financial sector exempted from the administration's wrath? Hedge funds etc., don't they benefit just as much from the ability to burrow near zero in the United States and lend at higher rates abroad? And if the answer is that this "carry trade" is very risky and the hedge funds have earned their returns, why is the trade not just as risky (and the returns as earned) for banks?

  6. If the tax is based upon the size of a banks' portfolio of loans, does that not contradict the administration's stated goal of encouraging banks to lend more? If the tax is based upon the riskiness of those loans , why are we confident that we are better at judging riskiness today than we were in 2006?

  7. Which committee of Congress will have jurisdiction over this new idea for holding bankers to account? Would it be ... Ways and Means, chaired by Charlie Rangel? Why yes I believe it would. It will be interesting to hear Chairman Rangel discuss the importance of honest disclosure and full responsibility for one's obligations.

  8. Is 2010 to be the year of the Obama tax increase? As I count them, in addition to this proposed new tax on banks, there are 1) the jump in tax rates as the Bush cuts expire; 2) the increase in the Medicare payroll tax proposed to fund health care reform; 3) the excise tax on high-value health plans; 4) the implicit tax increases in cap-and-trade; 5) the implicit tax of the health insurance mandate. Not saying they are all bad ideas, but there sure are getting to be lot of them. And I'm sure I forgot some, didn't I?

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Does anyone in the Administration actually believe the banks will pay this tax out of their pockets? The bank's customers will ultimately bear the brunt of this tax. Let's not forget, it was the taxpayers' money that they were given, now some can't pay it back, and will now soak their customers (taxpayers) to make up for the shortfall.

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There is a certain irony in Congress worrying about ANY other institution looting the American taxpayer. With Congress on the job, the only question is how much unintended damage they will do to the financial system.

 

Good post, Steamboat! clapping.gifclapping.gifclapping.gif

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View PostDoes anyone in the Administration actually believe the banks will pay this tax out of their pockets? The bank's customers will ultimately bear the brunt of this tax. Let's not forget, it was the taxpayers' money that they were given, now some can't pay it back, and will now soak their customers (taxpayers) to make up for the shortfall.

 

Exactly. It's an indirect tax on the people. Obama taxes the banks and they pass the cost on to their customers making the banks look like the bad guys when in reality its the Democratic Congress and Administration that are responsible.

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the government took in some $46 billion in profits from the banks under Tarp.

 

so if you're Chase, who was able to manage your risks better than you peers, and HELP the government clean up the mess, not take a dime of taxpayer money, the government will not punish you with a tax - instead of you letting you reap rewards for good management.

 

and all taxes get passed along to the consumer at the end of the day.

 

bravo for another bone head movement to cut our nose to spite our face.

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making the banks look like the bad guys when in reality its the Democratic Congress and Administration that are responsible.

 

 

you do realise that the Bush misadministration drafted TARP yes ?

 

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View Postyou do realise that the Bush misadministration drafted TARP yes ?

 

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We're not talking about TARP, we're talking about the new bank taxes Obama wants to enact.

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BTW, why is the Obama Administration holding the banking industry responsible for bad TARP loans that were made by his cronies when they had no input on who got money and who didn't? Should they not have used better prudence when they were doling out the funds?

 

But hey, in a socialist society that is neither here nor there.

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View PostBTW, why is the Obama Administration holding the banking industry responsible for bad TARP loans that were made by his cronies when they had no input on who got money and who didn't? Should they not have used better prudence when they were doling out the funds?

 

 

But hey, in a socialist society that is neither here nor there.

 

I would place blame on who was in charge of giving out TARP funds.

 

 

But I would not let the banks off the hook when they were the ones that begged for the money. I know not all the banks that got money asked for it, but many of them did. If they didnt TARP probably would have never happened.

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View Postyou do realise that the Bush misadministration drafted TARP yes ?

 

cwm15.gif

 

You do realize the Obama misadministration has yet to end the TARP program yes? Now that this $700B bucket labeled "TARP MONEY" exists, and is getting refilled every month, they are throwing around ideas on how to spend it again...use it or lose it.

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We're still guaranteeing $30 billion of Chase's debt. There's around $300 billion that the taxpayer is still on the hook for under the TGLP. What would profits have been otherwise?

 

Also, competition is supposed to prevent banks from passing these taxes along to their customers. If it exists.

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Another quick question: Does Frum really think the purpose of the Fed's action was to get banks back to being profitable?

 

Never mind the tax then, hide the pitchforks.

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