President Barack Obama is expected Thursday to propose taxing large banks and other companies based on their exposure to risk, White House officials said.I wonder if anyone remembers how some banks were forced to take TARP funds even though they didn't want them? I wonder if anyone remembers that much of the financial crisis was caused by Democrats insisting that these institutions give mortgages to people who couldn't afford them, at rates that were often ridiculous, on homes not worth near the amount those institutions wrote down on loan applications? Hmmmmm.......
The plan marks the latest in a slew of proposed fees, penalties and constraints the White House envisions slapping on Wall Street during the cleanup of the U.S. financial crisis, and marks a new stage in the White House's populist assault on the finance industry.
Administration officials went out of their way Wednesday to show no sympathy for big banks they acknowledged would lobby hard against the proposal.
"The banks that are in question were significantly responsible for the enormous degree of the reckless risk-taking that was borne throughout the economy," one official said.
If approved by Congress, the new tax -- which the White House calls a "financial crisis responsibility fee" -- would force about 50 banks, insurance companies and large broker-dealers to collectively pay the federal government roughly $90 billion over 10 years. Of the 50, about 35 would be U.S. companies and 10 to 15 would be U.S. subsidiaries of foreign financial firms.
Finally, it is mind-blowing that financial institutions are being forced to pay these fees and taxes in part to re-pay money that was given to the automotive sector. Only under socialism would one (nearly) government run/owned industry be made to pay for the sins of another. The reasoning?
The taxed firms are expected to pay the cost of bailout money that went to General Motors Co. and Chrysler LLC, which are exempt from the tax. The administration official defended the omission by contending that U.S. auto makers collapsed in part because of a financial crisis of the banks' making.Not only is that a stretch, it is flat out wrong. Union mismanagement and industry mismanagement are the reasons behind the automotive collapse. Banks failing had nothing to do with GM and Chrysler failing. The automotive industry didn't get into this predicament overnight; this failure has been a long time coming. People who knew better have been telling these companies for years to get their collective heads out of their butts and make some changes.
It is a sad day in America where government is increasingly used to punish and marginalize people and industry. I think if you look back at Russia's history, you will see they did (still do) the same thing to their country.