President Obama on Thursday called on Congress to tax the largest banks to ensure that U.S. taxpayers don't lose a penny from the federal bailout of the financial, auto and insurance industries over the past year.
The "financial crisis responsibility fee" would target major institutions. It would be levied on those that were the main contributors to the financial crisis and the most significant beneficiaries of the extraordinary actions taken by the Federal Reserve and the Treasury Department.
Firms could be subject to the fee even if they never took TARP funds or if they took TARP funds but repaid them. That's because all major financial institutions benefited directly and indirectly from the efforts to stabilize the financial system, according to the administration.
If the fee ends up raising more money than is needed to fully repay the bailout money, the additional funds would be used to help improve the U.S. fiscal position, which was worsened by the crisis, the senior administration official said.
If firms who never took TARP or repaid their share are taxed, then the money is going to come from those firms customers and American taxpayers. This is just another way of Obama to screw with the American financial sector and in the process will hurt all players with this stupid tax.
Some major beneficiaries of the financial bailout will not be subject to the fee - namely, mortgage giants Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) and automakers GM and Chrysler.
In those cases, the administration didn't think the fee would be workable both because of the structure of those companies' assets and because of their current condition, the senior administration official said
Well two are owned by the unions and Fannie and Freddie are government agencies at this point buying up still risky loans on the taxpayers dime. That's why they are not subject to this disastrous law.