Thursday, January 14, 2010

Obama: Bank Tax

http://news.yahoo.com/s/ap/20100114/ap_on_bi_ge/us_obama_bank_fees

http://www.nytimes.com/2010/01/15/us/15tax.html?ref=business

"I think it is entirely reasonable to say that the industry that, A, caused these problems more than any other and, B, benefited from the activity, should be contributing," said Democratic Rep. Barney Frank of Massachusetts, chairman of the House Financial Services Committee.

"Politics have overtaken the economics," said Scott Talbott, the chief lobbyist for the Financial Services Roundtable, a group representing large Wall Street institutions. "This is a punitive tax on companies that repaid TARP in full or never took TARP."

Even before details came out, Jamie Dimon, chief executive of JPMorgan Chase & Co., said: "Using tax policy to punish people is a bad idea."

What do you think?

5 comments:

  1. WiThout having read the article, my question to get some discusion going is, what tax is NOT punative?

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  2. There is a difference with taxes. A tax on cigarettes is punitive to that behavior, but a tax on income is not an action against you working.

    What Scott Talbott is saying is that the tax is only aimed at one group to punish them. I guess me question is, is that legal to tax/punish one group just because you may not like them or there business?

    I hate large banks, so don't think I'm defending them. But here I see taxes as being used as a weapon. I don't know if that is healthy.
    What do you think?

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  3. what i was saying, probably too briefly, is that basically any tax can be framed as punitive. Granted i think your distinction between punitive and non-punitive taxes is probably what is usually what separates them.

    My thought though, is that an income tax is not punitive because it is deemed a responsibility of citizenship or something to that effect. I think the same reasoning could be applied to banks that received TARP funds and/or banks that are culpable in our present situation.

    It makes more sense to me to say that all taxes are punitive, because to a great extent they are. We just have to decide which ones are acceptable or fairly punitive.

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  4. This is what obama said on his weekly address,

    "That is why our goal with this fee - and with the common-sense financial reforms we seek - is not to punish the financial industry. Our goal is to prevent the abuse and excess that nearly led to its collapse. Our goal is to promote fair dealings while punishing those who game the system; to encourage sustained growth while discouraging the speculative bubbles that inevitably burst. Ultimately, that is in the shared interest of the financial industry and the American people."

    From reading his own words this "fee" is to the government's attempt to dictate behavior. He doesn't argue that the tax is a responsibility of citizenship. Therefore I place it under the same as the catagory of cigarettes or even worse under the idea of attacking the people that my political base hates.

    The motivation of the tax is what is bothering me. If we get into the custome of taxing those that we don't like at any given time, soon it could get out of hand. If the health bill doesn't pass, will then we tax health insurers? If one doesn't like abortions, could they begin taxing clinics? If one doesn't like guns, could we tax guns to death.

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  5. here we have one of the places that our political views diverge. I have no problem with taxes like this. I have no problem with cigarette taxes. It enables the gov't to operate programs that are beneficial to the nation.

    I think it is reading into his words and motivation to say that he is attacking his opposing political base. surely they would be opposed to the idea but if he is making policy in order to attack the opposition, he is likely the most childish president that we have ever had.

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