January 14, 2010
Obama announced that he would tax large financial institutions to get bailout money back. But, it’s hard to say whether this tax will be paid for out of executive salaries or passed off to consumers in additional bank fees.
Obama advisers believe the administration can make an argument that banks should tap their generous executive bonus pools for the fees instead of passing the cost on to consumers. The Globe and Mail
Hmm…I wonder what makes them think that there will be a sudden explosion of conscience on Wall Street. I think they’re hoping it’ll go something like : “Hey, instead of charging every customer an additional $0.01 per transaction, let’s just give up our bonuses instead.”
So, this populist tax…although it sounds great, is not going to work. Consumers will end up paying the government back for the bailout (which is essentially consumers paying themselves back) and bank executives will maintain what Obama describes as their “obscene” bonuses.