For the first time ever, Obama actually proposes something reasonable to rein in the banks. And it is very well-targeted too, to penalize big institutions that depend on non-retail deposit liabilities etc. Now, if he makes that tax about 10 times bigger, that would count as some real progress..
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/14/AR2010011400927.html ---------------------------------------------------snip "Using tax policy to punish people is a bad idea," Jamie Dimon, the chief executive of J.P. Morgan Chase, told reporters Wednesday after his testimony before the Financial Crisis Inquiry Commission. "All businesses tend to pass their costs on to customers." But by imposing the tax on only 50 of the largest financial firms, the administration said that it hoped to protect consumers. Firms that raised prices would give smaller rivals a competitive advantage, creating an incentive for companies instead to swallow the cost, potentially by reducing employee pay. Obama said Thursday that companies would be wrong to do otherwise. "Instead of sending a phalanx of lobbyists to fight this proposal or employing an army of lawyers and accountants to evade the fee, I suggest you might want to simply meet your responsibilities," the president said. The proposed tax would be collected from roughly 50 banks, insurance companies and Wall Street trading houses with assets of more than $50 billion. The list includes companies in which the government holds ownership stakes, including Citigroup and American International Group. It also includes subsidiaries of foreign banks such as Deutsche Bank and Barclays, which did not get direct federal aid but benefited from other rescue programs. The size of the tax is based on the administration's estimate that it will lose $117 billion on its most high-profile bailout program, the $700 billion rescue fund created by Congress in fall 2008. If the final loss from that program exceeds $90 billion, the government would continue to collect the tax until it is recouped. If the total loss equals or falls short of $90 billion, the tax would expire after 10 years. -raghu. -- "Eat the rich, the poor are tough and stringy." _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
