WASHINGTON, D.C. (YBH.ME) – In a move sure to be met with resistance from Wall Street, President Barack Obama is set to unveil a tax proposal on Thursday that hits banks with a levy that amounts to 15 basis points or 0.15% of the liabilities on their balance sheet.
UAW presses White House advantage.
The tax will only apply to financial companies with assets of $50 billion or more. The purpose of the tax is to ensure that the “American people” get back every dollar lent under the TARP program. Incredibly, the tax will apply to banks who have already paid back the TARP money, and to banks who never borrowed any. Over ten years, $100 billion is projected to come into government coffers from the levy.
Ironically, it is the union-controlled auto companies, GM and Chrysler, that will be responsible for most of the loss of TARP funds. The auto companies are controlled by unions that are highly sympathetic to the President and Democrats, and are among his and the party’s biggest donors.
The President is attempting to tie in to, or cause, a backlash against “Wall Street,” with the tax. Unfortunately for Mr. Obama, public anger is turning toward individual state houses and Washington itself instead. With unemployment at 10%, huge increases in government spending and a ballooning deficit, Main Street is having trouble “connecting the dots” from no job to a banker hundreds of miles away.
The disconnect between Democrats’ anger at Wall Street and the public’s actual ambivalence over the issue is hurting the Democrats’ drive for vast new regulations over the nation’s financial sector. Many Americans do have anger over the misdeeds of the financial sector, as there are many. However, the idea of the government setting pay and issuing punitive taxes on the sector smacks an even larger group of Americans as simply wrong.
If enacted, the tax would hit the nations 50 or so biggest banks.
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John Romano is the publisher and editor of Yes, But However!, a musician, a former political correspondent for BBC Radio London, and a serial web entrepreneur. Follow him on twitter: twitter.com/yesbuthowever or John Romano on Google+John Romano article archive.
