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Obama To Propose Fee On Financial Firms To Pay Back TARP

January 20, 2010 by  

Obama to propose fee on financial firms to pay back TARP On Thursday, President Barack Obama will propose his plan to recoup the $117 billion spent on the Troubled Asset Relief Program (TARP). A senior administration official has said that the president will call on Congress to tax the nation’s largest financial institutions to recover the debt.

Obama’s "financial crisis responsibility fee" will charge firms with more than $50 billion in assets approximately 15 basis points, or 0.15 percentage point, of covered liabilities, according to Reuters.

The fee is designed to take effect on June 30 and will run for a minimum of 10 years. Approximately 50 firms will be covered under the plan that will be officially released in February in the president’s 2011 budget.

Fannie Mae, Freddie Mac and all U.S. automakers, who received bailouts similar to those given to major financial firms, will be spared from the tax.

However, the fee will be levied on financial institutions even if they have already paid back the money that they received from TARP.

Meanwhile, firms with more than $50 billion in assets that did not receive support from the federal government will also be subject to the tax because they benefitted from the stability that TARP brought to the financial world, the official said.

"This proposed tax will do nothing more than stifle economic recovery and encumber more pressing concerns, such as covering new regulatory costs," said Steve Bartlett, president of the Financial Roundtable, quoted by CNN.
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  • Brenda

    I think this is one of the best things that President is trying to implement. This does need repaid,we must certainly should not have to repay, But the Fannie Mayes and such should have to pay back also!! They are part of the reason this all happened too!! Let’s get this countries infrastructure back on track or we are going to fail as a nation.

    • J C

      Brenda, unless we adhere to basic rules of economics the nation is going to fail. “Bail Outs” fly in the face of those basic rules.
      They should have been let to fail in the first place.

      • Disgusted

        Never should have bailed them out is exactly right! Too big to fail is such crap. My husband and I own our own business, if we mismanaged it and took risks that didn’t pay off for us positively we would be out of business! That’s how it works. Bailing them out was the first mistake of many that have created a huge snowball rolling down the mountain that we are all standing at the bottom of. Sure hope we can dig our way out!

    • Disgusted

      You actually think this tax is a good idea? Wow, I bet you voted for him too.
      Some of the banks have already paid back the money with 8% interest. Would you pay further taxes on your mortgage if you had already paid the money back with interest? This tax is an unlawful penalty being imposed and by doing it our government is once again overstepping their bounds. This tax is unconstitutional, discriminatory and down right wrong, and if it is passed could set a precedent that none of us wants. Yes I think anyone that received funds should pay them back, however this additional tax is not the right thing to do.

  • http://victorbarney@embarqmail.com Victor L Barney

    STOP OBAMA! THIS “PROGRESSIVE MARXIST” USING “MAO” of CHINA HAS THE SAME AGENDA AS THE TERRORIST—DESTROY OUR ECONOMY!!!

  • Warrior

    Let’s start with a miniscule .15%, we can always up that if we need more. In fact, why don’t we just raise taxes on all private business until they agree to put people back to work. We must keep the trough full!

    It is time for Americans to just say enough. Cut your own salaries and benefits. Make some sacrifice yourself. If Obummer took this approach, the masses would come right back into his camp.

    Oh sorry, that is the hoax and change I was hoping for. Because this approach has not even been considered just shows how these creatures view themselves (as Elitists). Throw em all out.

  • cr747

    BELIEVE IT WHEN YOU SEE IT

    bp

  • Robert

    Rather than impose another tax on banks Obama, why not start with cutting foreign aid? I resent that my hard earned tax dollars are being given to other countries when so many of our own citizens are in need and hurting. Let all the other countries with billions of dollars in surplus money start doing their fair share. While your at it, kick out the UN from New York and if we have to pay a membership fee, then give them the IOU’s other countries owe us for winning WWII. Let the UN collect on those debts.

  • Neil

    It is totally unfair to place a tax on banks that have repaid the TARP Funds with interest. Congress (Barney Frank) placed excessive pressure on banks to lend monies to borrowers who were not qualified for the loans to start with. Then Mr Frank declared that Fannie Mae and Freddie Mac were in outstanding condition and did not need any further Govt Oversight.

  • JC

    So in many cases the Govt/ Fed actually forced banks to take money they didn’t even need. Now they want it back with “The Vig”. Criminals.

  • http://google raymond

    R,R Im so sick and tired of hearing that we shoud do this and that we shoud foll the rules that were set up long ago by people that knew what ty wher doing The people we have in 0ffice now only look for themselfs we are just numbers to them

  • Charley Boy

    Our Federal Government needs to promote business development and stop promoting welfare and unemployment benefits.

  • Robert

    Tax of 0.15 percentage points of covered liabilities on Banks with Assets of 50 billion or more? Now that’s a real job killer. So here I am, a small business owner with 8 employees. I have a line of credit with my bank who happens to have more than 50 billion in assets. I usually draw down $200,000 each month to cover expenses and the bank uses my inventory, receivables, plant and equiptment as collateral against my line of credit to give me a favorable interest rate. So this would translate into a tax on banks of $300.00 a year. Now multiply that sum by say 1,000,000 small businesses of similar nature and that tax on banks equals $300 Million. And that’s just small businesses. What about Mid Cap companies with 100′s of employees. I would say that a conservative estimate would be at least 5 times that of small companies. Now take large cap companies with 1,000′s of employess and I would conservatively estimate the amount would be at least 5 times that Mid cap companies. Add it all up and were’re talking about almost $10 billion. You think the banks are going to absorb this? No way! They’ll pass it onto the borrowers. And what about credit cards and mortgages. Will those be subject to this tax also? Now wer’re talking about a tax on roughly $3.5 Trillion. Mind boggling! And during all of this, Fannie Mae, Freddie Mac, AIG, GM, Chrysler and all the rest of the bailed out non-banks get a free ride. So what is this administrations response to this? Banks are the enemy and we have to punish them. Yea, right. Like Barney Franks, Chriss Dodd, Nancy Pelosi, Harry Reid and God himself (Obama) are saints and had nothing to do with any of the financial mess we’re in today. Rather than send a message to Washington, send a mirror to each and everyone in Washington. Maybe they’ll finally get the picture. The American people are looking for solutions not more taxes.

  • Disgusted

    It is discrimination to tax only some of the financial institutions because they took bail out (TARP) funds and yet give other financial institutions and the Auto Companies that also took the bail out (TARP) funds a pass on the tax. How can this be legal?
    Isn’t it taxation without cause to tax the companies on the TARP funds they took if they have already paid the funds back with 8% interest. How can this be legal?
    We all know who is going to end up paying for this tax in the end …… you and me!
    I am so sick of this administrations pompous attitude of “we can do whatever we want”. I hope the election in MA sent a clear message to our elected officials in Washington that we the people are sick and tired of their elitist attitudes.
    Change. Yeah we got change all right. I hope all you those that voted for this dip are happy with the change they got!

  • usmadgirl

    Robert,

    Agree! Some of the banks have already paid back WAY MORE than what they actually received. AND, to tax those banks that never received ANY money, is just another way for this administration to try to pay for ITS own stupidity & insane spending! They think we’re so stupid that we don’t realize it’s not a tax on “those mean old banks”, it’s just more tax that will be passed onto us!

    “Barney” (& the other cartoon characters) should have to pay the tax himself since he lied to Bush about “FNMA & FHLMC” being just fine!

    If Obama breaks all our banks, here comes the “World Bank” – his ultimate goal!

  • eyeswideopen

    Disgusted, you aren’t up to date on your facts. The auto companies, actually have loans, and are paying them back with interest. You don’t want the banks to pay back the money we fronted them? How nice of you. Since it was bad banking practices that almost caused another depression , and did affect the entire world banking, don’t you think they should be responsible for the credit defaults that helped generate this mess? If I run my business incorrectly, and make bad investments, are you going to bail me out?

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