Obama Proposes Tax on Banks
On Saturday, President Obama announced his proposal to tax banks in order to recover the funds spent on them in the economic bailout. With many economists and analysts believing that the economic recession is now ebbing and that the world is seeing the last of its effects, the President of the United States has deemed it proper for banks to repay what they have borrowed.
Obama further adds that if banks are able to afford billions of dollars in executive and employee bonuses then it is only proper for them to pay back what they have borrowed from taxpayers. Understandably, Republican legislators and bank executives are opposing the proposal to be passed into law.
Congress must vote on a proposal before it becomes a law. In this case Obama’s proposal may be in jeopardy since Republicans are already opposed to it and that the GOP is in danger of losing their 60-vote majority in the House with Democrat Martha Coakley and Republican Scott Brown in an unexpectedly tight race for the seat of Massachusetts long held by the late Democrat Edward M. Kennedy, who passed away last year. Brown is known to oppose Obama’s taxes on banks proposal.
The President proposes a 0.15% tax for banks that were bailed out by the government. This is estimated to last for 10 years generating approximately $90 billion. The proposed tax measures will apply to about 50 of United States’ biggest banking institutions. Banks with more than $50 billion worth of assets and even those banks that did not receive a single penny from the $700 billion bailout are to be included in the proposed tax measures.
Obama has stated that the banks have created a problem and that the government assistance proved to be crucial in mitigating further damages to these institutions. Most of these institutions have already paid what they have borrowed from the government but the President further adds that everything borrowed from taxpayers’ money shall and will have to be repaid.
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