Mindful of soaring deficits and an anti-Wall Street mood, President Barack Obama wants a new 10-year tax on the country’s largest banks to cover a projected $117 billion shortfall in the government’s financial crisis bailout fund.

The president planned to propose Thursday a levy of 15 basis points, or 0.15 percent, on the liabilities of large financial institutions to make sure every dollar spent from the $700 billion Troubled Asset Relief Program to rescue Wall Street firms, auto companies and mortgage holders is either repaid or paid for. Congress would have to approve the tax.

A senior administration official said the tax, which officials are calling a “financial crisis responsibility fee,” would apply only to financial companies with assets of more than $50 billion. Those firms – estimated to amount to about 50 institutions – would have to pay the fee even though many did not accept any taxpayer assistance and most others already paid back their government infusions.

The official said banks could pay for the tax by tapping their generous executive bonus pools. The administration official described the plan on the condition of anonymity because it had not been officially announced.

At issue is the net cost of TARP, the fund initiated by the Bush administration to help financial institutions get rid of toxic assets. The fund has since evolved, helping not only the banking sector, but also autos and homeowners.

Insurance conglomerate American International Group, the largest beneficiary with nearly $70 billion in bailouts, would have to pay the tax. But General Motors Co. and Chrysler Group LLC, whose $66 billion in government loans are not expected to be fully repaid, would not be subject to a tax.

Bankers did not hide their objections.

For Additonal Information on this:

http://www.reuters.com/article/idUSTRE60D1PA20100114?feedType=RSS&feedName=topNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtopNews+%28News+%2F+US+%2F+Top+News%29&utm_content=Google+Feedfetcher

http://apnews.myway.com/article/20100114/D9D7FIMG0.html

Face Forward Comments

Obama knows who uses banks and who dosen’t.  He also know that the banks will simply pass the fees on to their customers.  More redistribution of wealth.

Tags: Bank Tax, obama, TARP, Tax Payers, Wealth Redistribution

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