Max Baucus: A bank tax is coming

[kpete]

Source: Politico

It was a short hallway conversation but spoke volumes about the dilemma facing Democrats, hungry for new revenues after emptying the cupboard on health care reform.

“I don’t think there’s much doubt that there will be a bank tax,” Senate Finance Committee Chairman Max Baucus told POLITICO. And more than ever, the Montana Democrat signaled that Congress will also crack down on wealthy hedge fund and private equity partners who shelter their income as capital gains — taxed at half the top 35 percent rate.

Three times in recent years, the House has voted to rein in the so-called carried interest provision — only to meet Senate resistance. That’s changing with the pressure to find revenues to pay for other priorities such as a $35 billion measure extending popular tax provisions for businesses and families.

“I’ve asked my staff to look at alternatives ... Carried interest will probably be part of the offsets,” said Baucus. “We were thinking of putting it on later as part of tax reform. But we’re here; we’re here now.”


Read more: http://www.politico.com/news/stories/0410/36326.html#ixzz0mDjCcImh

[sinkingfeeling]

1. Leave it to politico to say it was the Democrats that emptied 'the cupboard on health care reform'.

Guess starting 2 trillion dollar wars, passing $3.5 trillion in tax cuts, and giving Big Pharm the Medicare Drug bill all without any method of payment, was stocking that cupboard.

[proudohioan]

4. Yeah, that was my thought, too.

[joeglow3]

12. To an extent, they did

Both houses passed bills to extend many IRC provisions - AMT patch, R&E credit, etc. In order to pass these benefits, they both had many revenue producing provisions. Well, most, if not all, of those revenue producing provisions were placed in the Health Care bill to get it passed. Thus, they are now faced with the challenge of passing the extenders, while finding new revenue offsets.

Another item that has been out there forever was the codification of the Economic Substance Doctrine. They needed to revenue offset for the health care bill, so they finally managed to get that included. Thus, as it relates to the IRC, it is much more bare now.

[Cronus Protagonist]

2. The cupboard was emptied for healthare reform?

Really? Why would one trust a source who says things like that when the CBO says the new law will be a net saver, not a loser?

[Igel]

27. One has to distinguish between

the health care reform bill and health care reform as a goal. They are different. I don't know what you mean by "HCR law."

Take the student loan bill. It saved money by restructuring student loan administration. But the student loan bill didn't show any real savings, even though it did produce hefty savings.

That's because all the net savings in the HCR bill were student loan savings--at least the HCR "savings" and the student loan savings were about the same amount. Had the student loan bill subsequently failed to pass, the HCR bill would have retroactively gone from saving money to being about revenue neutral. Take out other "savings" scavenged from elsewhere and you get a net loss on the HCR bill. This is a common game: You make a bill revenue-neutral by incorporating savings from all over the place to make the *goal* of the bill sound revenue-neutral when it's not.

The CBO rates bills. It means that the Medicare buy-out bill that passed a few weeks after the HCR bill wasn't included in the Medicare costs, and would more than gobbled up the HCR bill savings. Again, it was a different bill. Therefore it got a different rating, but it's a health-care (reform) expense.

The problem is that the press and administration made it sound like health care reform would save money by reducing Medicaid, Medicare costs, by reducing prescription costs and doctors' fees, by decreasing the overall cost of insurance by increasing the subscription pool. That this "bending the cost curve down" was all it took. But balancing the HCR bill's budget required a bailout from a lot of different sources and putting a few large expenses "off budget".

[edwinmathews]

3. The vault

is empty . How much is the bank tax going to cost the public because thats who will end up paying it .

[crazylikafox]

5. Really? Break up the banks & make them compete. Then they can't pass everything on to consumers.

[MisterP]

21. I don't think that would necessarily happen: "competition" isn't some magic wand

it's not that the system is "not capitalist enough" by becoming an oligopoly; simply having more insurers or banking firms wouldn't necessarily help us (outside the fact that local firms might pay more attention to their customers): it's regulation, not the neoclassical or neoliberal economists' magic free market, that has brought any improvement

[JDPriestly]

7. Depends on how you define "the public."

I, for one, don't have a whole lot of money in banks or anywhere else. The people who keep a lot of money in banks and investments made through companies that will be taxed will pay this one. Everyone will pay a share, but of all the ways to tax, this is one of the fairest. Those who are making money just by leaving their money sit in banks will pay that tax.

[totodeinhere]

9. The vault was emptied by shrub and darth cheney to pay for their wars...

and give tax breaks to their rich friends. Now the Dems have to find a way to replenish it.

[AlbertCat]

6. A "Bank Tax"?

What is that... exactly? Are they gonna tax the building? Do banks not pay taxes now? I mean... what is a "Bank Tax"? A tax to use the bank? A tax to have a bank on your street? a tax to have a bank in the city? A tax to own a bank?....

[Ter]

13. Taxing percentages of our money in the bank

So if there's $100 in your account and the tax rate is 2%, they take $2 out, leaving you with $98.

[sinkingfeeling]

15. Not true at all. It's a plan to tax the liabilities of banks. The riskier the 'investment', the

higher the tax to the bank.

[totodeinhere]

8. I do not trust Baucus. He is the same one who blocked the public option because he gets huge...

contributions from the health insurance industry. He is probably just playing the financial sector in order to get more contributions to line his pockets.

[karynnj]

10. He was very clear on why he did not include a public option - it could not get 60 votes

That was obvious just from the Finance committee.

[totodeinhere]

18. If he had supported it then maybe it could have got 60 votes.

He was too busy cozying up to the Health Insurance lobby and kissing GOP ass.

[karynnj]

25. No it wouldn't - three words Lincoln Lieberman Conrad

All three 100% against a public option. Baucus actually said in the Finance committee when they were debating it, that he liked it but that he wanted a bill that could pass the Senate and there too few Senators in favor of it. He also felt that the entire bill could not be done by reconciliation. this was abundantly seen to be correct when they did the reconciliation part.

[harun]

22. It isn't his job to worry about 60 votes.

[karynnj]

24. It was his job to do that

and that is why the Reid bill followed its outline so closely.

[florida08]

11. From NYT

The proposed tax would apply to bank, thrift and insurance companies with more than $50 billion in assets and would start after June 30. It would not apply to certain holdings, like customers’ insured savings, but to assets in risk-taking operations. The levy would raise an estimated $90 billion over 10 years, according to the White House.....

Big banks object that most of them already have repaid the government with interest. The administration, anticipating that argument, called its tax a “financial crisis responsibility fee” aimed at those institutions whose risk-taking caused the problem in the first place...

Mr. Geithner said such a tax would be passed through to customers. The administration now argues that big banks will not be able to pass on the costs of its levy without risking a loss of market share to rivals that are not subject to the tax.

http://www.nytimes.com/2010/01/15/us/15tax.html

[LaPera]

14. Fuck the whore Max Baucus! He's again stiring up shit, using the word "Tax" he's a right-wing bought

and paid for corporate clown who caters to and has the same corporate philosophy as the republicans...He knows perfectly well that as majority party chair, heading the Senate Finance Committee, Baucus will see millions pour into his pocket from corporations, for his uh, "re-election campaign" of course!

"“I’ve asked my staff to look at alternatives"....Yeah, right Baucus, to help the corporate banks no doubt....the same staff who wrote and co-written by the insurance corporations that Baucus produced, an extremely weak health care bill with no public option...Baucus wouldn't even allow it to be discussed.

These same insurance corporations who gave Baucus millions upon millions of dollars and undoubtedly the banking corporations have and will as well....Corporations love seeing a rural state whore like Baucus chairing the Senate Finance Committee.

And as Baucus gets richer the more he never let's the corporations down.

[sinkingfeeling]

16. So, you think banks shouldn't be taxed on their 'gambling'?

[LaPera]

19. "Tax" is a bait word used by republicans to attack Democrats - Baucus is well aware of this.

I prefer regulations, legislation, cutting the loop holes, making the banks "gambling" ILLEGAL - I'm pushing for reform known as the Volcker Rule, I want to see monopolies, "too large to fail" banks broken up....there are plenty of other things the Dems have planned to help clean up the years & years of republican corporate deregulation's and surely other words than "tax" can describe the democratic plan more accurately.

However, Max Baucus is a proven corporate whore, (all one has to do is remember the corporate bucks Baucus took in and the shit legislation in favor of the insurance corporations he produced & called health care "reform" legislation).

Baucus absolutely knows the word "tax" has a negative stigma or connotation attached to it, that is diabolical tactic & purposely associate with the democrats used by the republicans unfairly & deceitfully for years.

Baucus is using the word "tax' to get lighter, do-nothing weaker legislation for his corporate money master pals, this time the banking corporations.

How quickly Dems forget, republicans count on it.

I certainly don't trust Baucus, do you?

[totodeinhere]

20. You are 100% correct. Baucus is in this only for himself and his corporate sponsors. n/t

[harun]

23. +1, he is a wholly owned subsidiary of the Lobbyists.

[lib2DaBone]

17. ..They need to put a trading tax on Derivatives, Credit default swaps...

Make Wall Street report ALL derivative trades.. none of these "over-the-counter" super secret non-reporting trades. There are trillions of dollars of these phantom derivatives just waiting to explode.. they are not shown on anyones books... they are subject to no laws or regulations.

Also, how about making Exxon-Mobile start paying some taxes on their $$BILLIONS?

But 10 to 1... I bet we get a National Sales Tax on America.. or a value-added tax on everything that walks, talks, crawls or moves.

Right after the November elections are over and all the checks have gone out from Goldman Sachs to CONgress... watch out , (BOHICA).... bend over here it comes again..

[florida08]

26. Senate just voted down

a resolution on a VAT tax, but Obama's debt commission says it's on the table. I don't see it getting any support though. As for a national sales tax republicans have been pushing that for years under the 'fair tax' scheme. They would have to abolish the IRS to do it so I don't see that happening either. Both are regressive. A flat tax might do something..but first let the unpaid tax cuts for the top 1-2% expire..raise their tax up to 50%..stop the earmarks..end the wars..

[go west young man]

28. Tax em and cut the military in half. Problems solved.

[bluestateguy]

29. I'll support that any day over a bullshit VAT tax

and throw in a tax on stock transactions and then MAYBE I'll even consider supporting keeping income tax rates where they are for the rich (after the Bush taxcuts expire, of course)

[SocialistLez]

30. I'd rather see a tax on bonuses similar to the UK's bonus tax. NT