Bank Tax - Beware

The new word from Washington is that we need to tax big banks to pay for TARP. While this may feel good from an anger standpoint, we should consider this carefully.

1. This tax would go on banks who did not participate in TARP at all. It would also go on banks who have repaid their TARP money (with interest). And remember that the government forced healthy banks to participate in TARP so that we wouldn't have a "run" on the unhealthy banks.
   
2. The tax would do nothing to get AIG and GM and Chrysler (along with GMAC) to repay the hundreds of billions of dollars we taxpayers loaned them through TARP.
3. The tax would do nothing to get back the hundreds of billions of dollars we taxpayers gave Fannie Mae and Freddie Mac in the past year, nor will it fix the problems in Fannie Mae & Freddie Mac that keep them coming back to us for more bailouts.
4. While it sounds good to tax big banks, guess who ends up paying? When entities have increased costs (like taxes) they pass them along to their customers (you and me).
5. Not only that, but if you want banks to lend more, then why are you taking away from the amount of money that they have to lend?
6. There are no restrictions on what is done with the money raised by this proposed tax – it will just go in the big pot of money that Congress likes to spend.
   

What is really sad about this is that the politicians are trying to make us feel they are doing something by blaming the big banks….all the while their friends at Goldman Sachs and AIG and Fannie Mae continue to rake in the money.

Don’t be fooled by this misdirection.