I’ve written before about the new "bank tax" President Obama is so fond of these days (and even did a bit on Fox News Channel to discuss more).
One natural question is, "who will pay the bank tax?" It’s true that it’s assessed on the 50 biggest banks, but surely that will be passed along to all of us. The "bank tax" is actually one of the most regressive taxes likely to be proposed by the Obama regime.
How will we pay the bank tax?
- Imagine opening up your bank statement every month and seeing a $1 "bank tax" surcharge in there. Assuming about 100 million active bank accounts in America and $12 in annual fees, that alone would be enough to pay about 10 percent of the tax every year
- Another mechanism might be to increase fees to manage 401(k) and IRA accounts. This could take the form of fees assessed to your employer (which you never see), or 12b-1 fees on your mutual funds (which you didn’t even know existed before I typed that)
- Befuddled by all the fees and costs on your house’s HUD-1 closing form? Here’s another one that might be in there. Check for it just above "county recorder fee" and just below "water reclamation fee"
The list could go on, but I take it you see my point. You can’t force the banks to reduce their profits in order to pay this new tax. Ultimately, the only way any business has to pay any tax is by increasing prices for what they sell. That’s exactly what’s going to happen here. It’s not the banks’ fault–it’s the Obama Administration’s fault for hiking taxes on a crippled industry in the middle of a deep recession.
Don’t believe me? Maybe you’ll believe Suze Orman.