Key features of Obama’s tax on banks
By APThursday, January 14, 2010
Key features of Obama’s tax on banks
President Barack Obama’s bank fee proposal at a glance:
Who pays: Financial institutions with assets of $50 billion or more. That would include firms such as Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co. and Wells Fargo and Co., all of whom accepted bailout money and have repaid it. It also includes American International Group, which accepted nearly $80 billion and has not paid it back. The fee would affect about 50 large firms.
Who doesn’t pay: Smaller community banks and some large banks with assets of less than $50 billion. General Motors Co. and Chrysler Group LLC, who received about $66 billion in government loans and aren’t expected to pay all of it back.
How the tax works: It levies a tax of 0.15 percent on bank liabilities, excluding FDIC-assessed deposits and insurance policy reserves.
How much it raises: $90 billion over 10 years. Sixty percent of the revenue would come from the top 10 firms
What’s the intent: Raise enough money to cover an estimated $117 billion shortfall in the $700 billion financial bailout fund. The tax would be designed to continue beyond 10 years until the money is recouped. It also is meant to act as a deterrent against excessive leveraging by taxing company debt.
