In Pictures: Obama’s Bank Tax – Robbing Peter to Pay Paul
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In his State of the Union Address, President Barack Obama proposed “a modest fee” on banks that “would pay back the taxpayers who rescued them in their time of need.” In truth, his bank tax would hit financial institutions who have paid back their bailout funds, with interest, while those who haven’t—Fannie Mae, Freddie Mac, General Motors and Chrysler—would get off scot-free.
As Politico reports, Sean Ryan at Wisco Research firm says Obama’s tax would have other effects, too. From Politico: “[Ryan] predicts the banks will simply pass on the cost of the new fee to their corporate customers, which quite likely will move it along to consumers when possible.”
And more perversely, Ryan notes, the tax revenue will foot the bill for the aforementioned firms that received bailouts, yet haven’t paid anything back:
Since most banks either are in the process of paying back bailout money with interest or have already paid it back, “the loss in the [Troubled Asset Relief Program] that is gone and is never coming back under any scenario is the money extended to GM and Chrysler,” said Ryan. “So this is taxing banks to fund the auto bailout.”