Comments on: The punitive bank tax http://blogs.reuters.com/felix-salmon/2010/04/16/the-punitive-bank-tax/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: TaxLawyer http://blogs.reuters.com/felix-salmon/2010/04/16/the-punitive-bank-tax/comment-page-1/#comment-13652 Mon, 19 Apr 2010 03:34:32 +0000 http://blogs.reuters.com/felix-salmon/?p=3427#comment-13652 Well, isn’t this a voluntary tax? Don’t take on leverage, don’t pay tax? It sure is a lot lower rate than the tax I pay on cigarettes, alcohol or gambling–all voluntary taxes. At least my vices add a boost to the economy, and no bailouts are available.

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By: Greycap http://blogs.reuters.com/felix-salmon/2010/04/16/the-punitive-bank-tax/comment-page-1/#comment-13552 Fri, 16 Apr 2010 19:55:04 +0000 http://blogs.reuters.com/felix-salmon/?p=3427#comment-13552 Jonas_Cord, the point of a bank tax is not to punish banks but to make them pay for negative externalities that they foist on everyone else. These go well beyond TARP support or even the vast quantities of money that the government has lent to banks at below-market rates (so much for “lend freely at a penalty rate.”) As others have noted, the biggest single cost is the collateral damage done to the economy – approximated by the large divot in GDP associated with the current recession.

Or, in more inflammatory terms, why should tax-fattened hyenas like Dimon continue to feed at the public trough? What’s wrong with introducing some capitalist discipline to banking? If it takes a tax to do that, so be it.

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By: BottyGuy http://blogs.reuters.com/felix-salmon/2010/04/16/the-punitive-bank-tax/comment-page-1/#comment-13551 Fri, 16 Apr 2010 19:14:57 +0000 http://blogs.reuters.com/felix-salmon/?p=3427#comment-13551 Jonas_Cord writes “If they pay back their TARP loan in full with interest, why should they be punished?”

They are not being “punished” they are being insured by the U.S. taxpayer so they need to pay their insurance premium, and the insurance premium needs to be based on how much of a risk they are.

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By: HBC http://blogs.reuters.com/felix-salmon/2010/04/16/the-punitive-bank-tax/comment-page-1/#comment-13550 Fri, 16 Apr 2010 19:14:27 +0000 http://blogs.reuters.com/felix-salmon/?p=3427#comment-13550 Why acquiesce on the term “tax”? By any sensible definition of the word, this isn’t a tax. It’s a penalty for performing badly – and a relatively mild penalty at that, considering how badly bankers have behaved, which includes repeatedly trying to get their corporate welfare-mother obligation to legitimate taxpayers completely annulled.

If the major players go on complaining about it as though the rules of good business were incomprehensible to them, they should expect to be sent off.

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By: Jonas_Cord http://blogs.reuters.com/felix-salmon/2010/04/16/the-punitive-bank-tax/comment-page-1/#comment-13544 Fri, 16 Apr 2010 18:30:07 +0000 http://blogs.reuters.com/felix-salmon/?p=3427#comment-13544 If they pay back their TARP loan in full with interest, why should they be punished?

Punitive taxes on GM or AIG don’t make sense either, even though they’re the ones that we’re going to lose money on.

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By: TFF http://blogs.reuters.com/felix-salmon/2010/04/16/the-punitive-bank-tax/comment-page-1/#comment-13518 Fri, 16 Apr 2010 14:55:23 +0000 http://blogs.reuters.com/felix-salmon/?p=3427#comment-13518 Banks borrow short and lend long, so running a low discount for an “extended period” is a clear gift for the banks.

Nonetheless, there is no such thing as a free lunch. There will be a price to pay for subsidizing Wall Street in this manner, even if it is not immediately evident who is picking up the bill.

That said, I’m not convinced the banks are out of the woods yet. If the economy double-dips, and housing prices fall another 10-15%, we could see another massive wave of writedowns and foreclosures. The banks EMPLOYEES are making huge bonuses right now, but the bank SHAREHOLDERS are still vulnerable.

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By: voodoobunny http://blogs.reuters.com/felix-salmon/2010/04/16/the-punitive-bank-tax/comment-page-1/#comment-13516 Fri, 16 Apr 2010 14:29:38 +0000 http://blogs.reuters.com/felix-salmon/?p=3427#comment-13516 wait, make that a tax on highly-paid bankers’ *total compensation*….

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By: voodoobunny http://blogs.reuters.com/felix-salmon/2010/04/16/the-punitive-bank-tax/comment-page-1/#comment-13514 Fri, 16 Apr 2010 14:16:07 +0000 http://blogs.reuters.com/felix-salmon/?p=3427#comment-13514 Felix,

Don’t call it a punitive *bank* tax, call it a punitive *bankers* tax, and make it a tax on *salaries* for highly-paid bankers.

If it’s a tax on the bank as a whole then the banks can still roll out the old “it will get passed on to consumers as higher fees” argument. If you make it the whole tax about the bank*ers* pay when they screw up it will be harder for them to weasel out of it.

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