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sabra Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 02:54 PM
Original message
Bailed-Out Banks May Get Hit with New Tax
Source: CBS News/AP

New Tax Picks up Support in Congress; Dems Say It's Justified to Recoup Billions Spent Bailing out Wall Street

(AP) A new tax on large banks is picking up support in Congress as Democratic lawmakers target financial institutions that benefited from the Wall Street bailout to help pay for the Democrats' election-year agenda.

One key lawmaker, Sen. Chuck Schumer, D-N.Y., said Tuesday he wants to include the bank tax in a bill stiffening financial regulations that could come up for a vote in the Senate soon.

President Barack Obama has proposed a tax on bank liabilities that would raise an estimated $90 billion over the next decade. Democrats say the tax is justified to recoup billions spent bailing out Wall Street.

"I think the administration proposal is a common-sense way to make sure the taxpayers are repaid," Schumer said Tuesday at a Senate Finance Committee hearing on the bank tax.

Read more: http://www.cbsnews.com/stories/2010/04/20/business/main6415171.shtml?tag=stack
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The Northerner Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 03:01 PM
Response to Original message
1. I've been told it's unconstitutional. Is that true?
Edited on Tue Apr-20-10 03:02 PM by The Northerner
Some law-school friends of mine claim that these bank taxes are bills of attainders targeting a selected group of banks which were bailed out mutually.

Can someone explain if this is true or not?
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leahcim Donating Member (56 posts) Send PM | Profile | Ignore Tue Apr-20-10 03:20 PM
Response to Reply #1
5. Bill of Attainder
A tax on "Goldman Sachs" might count as a bill of attainder. I doubt that a tax on "banks" or even "banks that got bailout money" would count.
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anigbrowl Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 03:28 PM
Response to Reply #1
6. Difficult to say
The president's proposal is somewhat vague (specifying firms that received or were 'indirect beneficiaries of' TARP etc.), but on the other hand it's a proposal rather than a law, so that aspect would depend on how Congress actually wrote such a bill. Here's the proposal: http://www.whitehouse.gov/sites/default/files/financial_responsibility_fee_fact_sheet.pdf

Now another question is within the EESA (law which created the TARP) itself, at http://www.govtrack.us/congress/billtext.xpd?bill=h110-1424&version=enr&nid=t0:enr:568 - this could (and probably will) be construed to suggest a five year waiting period before any recovery action can take place. The Office of Management and Budget is supposed to draw up a report in 2013 on the net costs of TARP, and then any shortfall is to be recovered. I imagine that this requirement could be amended, though that's only a guess on my part.
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DJ13 Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 03:10 PM
Response to Original message
2. It grabs headlines, but I think this is a dodge from the real solution
Breaking up the TBTF banks to separate their investment segments from their deposit and loan segments.

Since Congress and the WH dont have the balls to do what needs to be done they are trying to placate the voters by proposing a tax.

It wont solve the problem.
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salguine Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 03:11 PM
Response to Original message
3. $90 billion over ten years to recoup the $800 billion they were given all at once.
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defendandprotect Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 03:13 PM
Response to Original message
4. k
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zipplewrath Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 03:31 PM
Response to Original message
7. Dubious this will happen
The White House has said repeatedly they don't want it. Snowe doesn't want it. Timmy doesn't want it. It's Obama's chance to say he rejected progressive ideas. This is the "public option" of finance reform.
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nykym Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-21-10 03:57 PM
Response to Original message
8. OK so if you or I
defaulted on a loan what would happen. Collection calls, collection agencies, legal consequences, garnishments etc. You know they would get their money one way or another. Why can't the government do the same thing? If they haven't paid back their LOAN with interest then freeze them and take what is owed. Use the very same tactics they use on us the common folk.
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