Sunday, January 17, 2010
Telling the financial industry it’s time to meet its responsibilities and help cover the cost of the federal bailout, President Barack Obama this week unveiled his tax on big banks to recoup almost $100 billion in costs. The tax would last 10 years and raise at least $90 billion for the U.S. Treasury, according to the White House. President Obama also said the total cost to taxpayers from the bailout of Wall Street was $117 billion, indicating the tax may eventually recover this higher total and last longer than a decade if necessary.
The fee would be equal to 15 basis points of a company’s net liabilities, which is the equivalent of 15 hundredths of one percent of the amount of tax owed to the government minus tax credits.
Beginning in July, the proposed tax would apply to banks, thrifts and insurance companies—including those not rescued by Washington—with more than $50 billion in assets. About 50 financial institutions would have to pay the tax, although it is estimated that the 10 largest firms would likely account for 60% of the total revenue. Citigroup would face the highest annual tax bill ($2.2 billion), followed by JPMorgan Chase ($1.9 billion), Bank of America ($1.7 billion), Goldman Sachs ($1.1 billion) and Morgan Stanley ($992 million).
-Noel Brinkerhoff
Obama Determined to Recover 'Every Dime' the Public is Owed from Bailout (by Tony Romm and Silla Brush, The Hill)
Taxing Banks for the Bailout (by Jackie Calmes, New York Times)
What the New Fees Might Be (New York Times)
Obama Gives Bank-Tax Details (by Cheyenne Hopkins, American Banker)
Fact Sheet: Financial Crisis Responsibility Fee (Department of the Treasury)
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