Observations on Obama's Bank Tax

Obama calls for bank tax as next step in reform

Excerpt:

Obama wants to slap a 0.15 percent tax on the liabilities of the biggest U.S. financial institutions to recoup the costs to taxpayers of the financial bailout.

"We need to impose a fee on the banks that were the biggest beneficiaries of taxpayer assistance at the height of our financial crisis -- so we can recover every dime of taxpayer money," Obama said in his weekly radio and Internet address.

Obama, who is in Canada to attend gatherings with leaders of the world's biggest economies, also used the address to welcome a deal by congressional negotiators on a historic rewriting of U.S. financial regulations.

Obama hopes to tout the changes as a model for other countries at the Group of 20 summit on Saturday and Sunday.

"I hope we can build on the progress we made at last year's G20 summits by coordinating our global financial reform efforts to make sure a crisis like the one from which we are still recovering never happens again," he said.

The financial regulation package would set up a new financial consumer watchdog, create a protocol for dismantling troubled financial firms and mandate higher bank capital standards, with the aim of avoiding a repeat of the 2007-2009 financial meltdown.

The bill, marking the biggest changes to the financial regulatory structure since the 1930s, still needs final approval from both chambers of Congress.

Obama, who hopes to sign the legislation by July 4, urged Congress to push the bill "over the finish line."

With congressional elections looming in November, Obama hopes the financial reform and the bank tax idea will resonate with U.S. voters furious over Wall Street risk-taking that led to the financial meltdown and the worst recession in decades.

Some lawmakers have indicated they are receptive to the bank tax proposal but others have questioned whether it is fair to impose the tax on banks that have already repaid money from the Troubled Asset Relief Fund to make up for losses by American International Group Inc and General Motors.

Financial companies with more than $50 billion in assets and hedge funds with more than $10 billion in assets will be hit with the new levy upon enactment and lasting until 2020.

Observations:

1. Many banks (and most of the large ones - eg Wells Fargo) have already paid back the TARP funds with interest
   
2. Some banks - Wells Fargo being one - resisted taking TARP funds in the first place but had them forced on them for the good of the economy
   
3. All business taxes ultimately are born by the populace.
   
4. What about GM ... (Government Motors)? They were on the receiving end of TARP and have not paid it back and probably never will! Speaking of GM ... my little retired mother lost all of her investment in GM. Talk about taking it from the little old lady!
   
5. And what exactly wasteful way will Obama spend this increase in revenue?
   
6. End in 2020? Like the telephone tax it will live on