“When President Obama announced the details of his Administration's plan to tax financial institutions, he said, "We want our money back, and we are going to get it." However, he doesn't seem to care who pays the money back, as most of the firms who would be forced to pay the "fee" either paid the money back with interest, took TARP money under duress only because the Treasury told them that they had to, or never took any money in the first place. The companies that have caused most of the TARP losses so far--GM and Chrysler--are exempt. The White House needs a villain to blame for the nation's continuing economic woes, and Treasury desperately needs revenue to reduce the massive deficits caused by the Obama Administration's spending policies. This is the wrong approach to reducing the swollen deficit and would inevitably cause more problems than it solves. It is a bad idea being used to score political points and should be dropped.”
With one exception, the Obama bank tax does not apply to the entities that caused TARP's losses. As of September 30, 2009, TARP lost money on its bailout of AIG, auto companies GM and Chrysler, and the administration's program to help people refinance mortgages. TARP's other programs actually showed a small profit and Congress is certainly not going to make those individuals who benefited from the mortgage refinancing plan repay the losses of that program. The fee would not apply to Chrysler or GM, either.
the Obama bank tax is not designed just to recapture some of the profits that financial institutions made last year since it would apply to both profitable and unprofitable financial institutions. This structure would make it even harder for undercapitalized financial institutions to rebuild their financial strength and increase the risk of failure if the economy goes back into recession.
the Obama bank tax would be on top of both (1) another proposed new Obama FDIC fee that would apply to roughly the same group of financial institutions, and (2) the corporate income taxes that they currently pay.
the Obama bank tax is not structured in a way that would reduce irresponsible risk taking. Although the cost will be highest on firms that use riskier ways to finance their operations, the 0.15% level is not high enough to discourage them from doing so. Instead, this Obama bank tax is much more a case of Washington seeking a “cut of the bank’s action”.
despite claims that the Obama bank tax would be collected only until TARP deficits are "paid for" (about 10 years), history suggests that these temporary taxes become a permanent tax.
“I don’t see any reason why they should be paying a special tax. Supporters of the plan to tax the banks are trying to punish people. I don’t see the rationale for it. Look at the damage Fannie and Freddie caused, and they were run by the Congress. Should they have a special tax on congressmen because they let this thing happen to Freddie and Fannie? I don’t think so. Most of the banks didn’t need to be saved.”
“Like clockwork, the banks and politicians who curry their favor are already trying to stop this fee from going into effect. The very same firms reaping billions of dollars in profits, and reportedly handing out more money in bonuses and compensation than ever before in history, are now pleading poverty. It's a sight to see. If banks can afford to pay out all those bonuses, he said, then they can repay taxpayers, too. "We're not going to let Wall Street take the money and run. We're going to pass this fee into law,"