BANK TAX MISSES THE REAL BAILOUT DEADBEATS IN DETROIT AND DC
January 19, 2010
Facing rising populist anger over his administration's billion-dollar bailouts, President Barack Obama proposed a $117 billion tax over the next 12 years on financial companies with assets of more than $50 billion. "We want our money back, and we're going to get it," the President said. The President is only half right, says Conn Carroll, the Assistant Director for the Heritage Foundation's Strategic Communications.
- The Troubled Asset Relief Program (TARP) has so far distributed $247 billion to more than 700 banks.
- Of that, $162 billion in principal and $11 billion in interest and dividends have already been repaid.
- Except for AIG, almost all banks that received taxpayer money are expected to pay back the American taxpayers in full.
According to the New York Times reports, the losses from the bailout fund are expected from money paid to rescue Chrysler and General Motors and the insurance giant American International Group, and from a program to help homeowners avert foreclosures.
The real deadbeats that are not giving us "our money back" are not the banks, but the union-backed car companies and failed government mortgage modification programs, says Carroll. However, the White House has chosen not to include the car companies among the institutions that will pay the so called "Financial Crisis Responsibility Fee." Also exempted are Fannie Mae and Freddie Mac, the government-sponsored entities that helped create the crisis.
In sum, this new $117 billion Obama tax will penalize firms that already repaid TARP, and some who never accepted bailout money to begin with, while also making it harder for Americans to get the loans they need to help our economy recover, all while letting the real deadbeats get off scot-free. If the President was serious about making taxpayers whole and restoring confidence in the banking sector, then he should end TARP now, says Carroll.
Source: Conn Carroll, "Bank Tax Misses the Real Bailout Deadbeats in Detroit and DC," The Heritage Foundation, January 15, 2010.
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