The new law that taxes all “big banks” 0.15% of their assets to recover $120 billion in TARP funds is raising eyebrows for several reasons. Interestingly, this tax is applied even to banks that never took TARP money, while AIG and the auto industry, which have yet to repay their debts, remain untouched.
This selective taxation raises a few points:
1. By taxing all big banks regardless of whether they received bailout funds, the government seems to be pushing these banks towards riskier behaviors. If banks are going to be penalized regardless, they might as well benefit from future bailouts. For example, employees at Citibank, which received government support, freely enjoyed lavish perks, while workers at non-TARP banks face strict spending limits. This inequity sends a mixed message about fiscal responsibility.
2. Exempting AIG from this tax because it’s largely government-owned creates a conflict of interest. It’s as if the government is saying it’s okay to avoid penalties if you are part of the system. This is hardly a lesson in accountability.
3. The auto industry, despite its significant role in the financial crisis and having paid back none of the taxpayer money it received, is also exempt. This suggests a double standard where the manufacturing workforce is valued more than the financial services sector.
Conclusion:
The past two years have taught us the importance of self-reliance. When crises strike, it becomes every person for themselves. Moreover, if there’s a chance to benefit from government giveaways, such as home loan forgiveness or TARP funds, it might be wise to take advantage of them. After all, these costs will be distributed across the population, so you might as well get your share rather than bear the cost without any benefit.
So, do you think the U.S. auto worker is more valuable than a financial services worker? Do unions like the United Auto Workers have too much influence in government decisions? Could forming a Financial Services Workers Union balance the scales? And do you think this tax proposal will pass into law?
What are your thoughts on benefiting from government bailout money?
