By now, you’ve probably heard that one of the trial balloons being floated by the Obama Administration in anticipation of the State of the Union speech is a new "bank tax."
Details are still coming in, but it would apparently apply to the top 50 banks in America, and would raise $117 billion over a decade. It would be a tax of $1.5 million for every $1 billion in certain bank reserves.
Supposedly, this is to recoup TARP funds. Except, of course, that the tax applies to banks that never accepted TARP. Also, the tax does not apply to some firms that received TARP (like Government Motors, AIG, etc.) So the TARP connection is flimsy.
In addition, firms have begun paying back TARP in droves (in most cases, with healthy interest). The Administration has at times told firms not to pay yet, which also calls into question the credibility of this being a measure to get TARP payments back.
It’s also been speculated that this would be paired with a one or two-year extension of the "Bush tax cuts." So, we’re supposed to agree to new savings-killing tax hikes just to keep the current tax rules we have in place?
All in all, it looks like another desperation power grab by an administration which has been characterized by desperation power grabs. At some point, they’re either going to have to rein in the socialist agenda, or they will find themselves in quagmires like healthcare for the next 3 to 7 years.