Obama wants to punish BIG banks via tax

[Chibibar]

http://finance.yahoo.com/news/Obama-tells-banks-We-want-our-apf-1137481979.html?x=0&.v=20

Ok.... I can understand if the big banks who TOOK the money and STILL giving out big bonuses to employee, that is fine and dandy, but punishing large banks who DIDN'T take ANY money or even PAID back too???? that is dumb.

Either way, the banks are NOT going to divert the bonuses from executive, those fee/taxes will be pass to the consumer no matter what the government said. It will more like higher non-affiliated bank ATM fees, higher bounce check fee, higher late fee, not having enough minimum deposit fee.... etc etc..

I think that is a bad idea overall and the consumer will get hurt by this.

 

[Espy]

They would have to pay up even though many did not accept any taxpayer assistance and most that did have repaid the infusions.

Lovely. Sounds about right though, I mean if they make money how dare they give it to their employees! Not that I think obscene bonuses for execs is a good thing but if they already paid the government back or didn't take any bailout money then this is, in my opinion, just government robbery.

 

[AshburnerX]

It's not even a choice not to pay out the bonuses: The Bonuses are defined in the contracts of the executives. If the conditions have been met, the banks have to pay out the bonuses or face lawsuits that would ultimately end up with them paying out even MORE than they promised.

That said, any executive who is actually demanding bonuses during these tough economic times is a fucking scum bag.

 

[WolfOfOdin]

I say throw the bonus-demanding exec's to the crowds in the streets and see how well their fellow Americans view them.

In all honesty though, I think in a time like this it's be, if nothing else a good PR move for large companies, especially ones that have been bailed out, to place a temporary moratorium on massive bonuses, with the withheld amount being added onto the next quarter's payout. The execs will still get their money, but not seem like robber barons in the eyes of the public.

 

[@Li3n]

Meh, he should just tax the bonuses...

 

[Shakey]

Still waiting on the new regulations that are supposed to prevent this shit from happening again. I really don't care if they get bonuses, just make an attempt at preventing another debacle like this.

 

[Bowielee]

Still waiting on the new regulations that are supposed to prevent this shit from happening again. I really don't care if they get bonuses, just make an attempt at preventing another debacle like this.

Therein lies the problems. There are probably more regulations governing the ownership of my DOG than there are of banks right now. Deregulation caused this whole mess in the first place.

I'm still pissed that the bailouts had absolutely no stipulations attached to them.

The CEOs of these companies don't LOOK like robber barons, they ARE robber barons.

 

[Shakey]

There are probably more regulations governing the ownership of my DOG than there are of banks right now. Deregulation caused this whole mess in the first place.

Not really. Banks have more regulations than you can ever wrap your mind around. The problem is they do the wrong thing and cause problems for the banks that aren't out to screw people.

 

[Soliloquy]

There are probably more regulations governing the ownership of my DOG than there are of banks right now. Deregulation caused this whole mess in the first place.

Not really. Banks have more regulations than you can ever wrap your mind around. The problem is they do the wrong thing and cause problems for the banks that aren't out to screw people.[/QUOTE]

Perhaps you've never seen Bowielee's dog.

 

[Dave]

I just love how they aren't calling it a tax. It's a fee.

What? Big banks don't like arbitrary fees for no fucking reason other than to take money away from them? Boo fucking hoo. Now you know how WE feel, fuckers!

 

[Chibibar]

I just love how they aren't calling it a tax. It's a fee.

What? Big banks don't like arbitrary fees for no fucking reason other than to take money away from them? Boo fucking hoo. Now you know how WE feel, fuckers!

while I can sympathize with the fee (yea I get hit once in a while and it does hurt when you are living from paycheck to paycheck) I don't think bank who never taken any government money should be punish. They are doing ok and pay their bonuses. I DO have issue when bank pay the bonuses when they are failing and need government help. There should be a clause to prevent that from happening (bank side)

 

[Kitty Sinatra]

I assume the reason all banks are getting hit is that this is an attempt at regulating the industry to avoid more near-collapses. It doesn't sound like very effective regulation in that regard, but it does seem like a step that way.

 

[Hyimi]

I just love how they aren't calling it a tax. It's a fee.

What? Big banks don't like arbitrary fees for no fucking reason other than to take money away from them? Boo fucking hoo. Now you know how WE feel, fuckers!

Yeah, and who do you think is going to pay that "fee" in the end? They are going to pass that on to us.

 

[Dave]

I just love how they aren't calling it a tax. It's a fee.

What? Big banks don't like arbitrary fees for no fucking reason other than to take money away from them? Boo fucking hoo. Now you know how WE feel, fuckers!

Yeah, and who do you think is going to pay that "fee" in the end? They are going to pass that on to us.[/QUOTE]

I know. But allow my self-righteous gloating for at least a little bit of time. I mean, it makes me giggle but I know that they'll just find more ways of taking our cash.

Bastards.

 

[Chibibar]

I just love how they aren't calling it a tax. It's a fee.

What? Big banks don't like arbitrary fees for no fucking reason other than to take money away from them? Boo fucking hoo. Now you know how WE feel, fuckers!

Yeah, and who do you think is going to pay that "fee" in the end? They are going to pass that on to us.[/QUOTE]

I know. But allow my self-righteous gloating for at least a little bit of time. I mean, it makes me giggle but I know that they'll just find more ways of taking our cash.

Bastards.[/QUOTE]

bingo! The banks are not going to take a hit on this, they are going to pass it right along to the consumer. Hence the comment of all the bank fees will go up.

 

[Espy]

bingo! The banks are not going to take a hit on this, they are going to pass it right along to the consumer. Hence the comment of all the bank fees will go up.

Hey, as long as the government gets more of our money thats all that matters right? I mean, hell, they've earned it!

 

[SpecialKO]

Got to this one late, noticed something interesting in the article.

The proposed 0.15 percent tax on the liabilities of large financial institutions would apply only to those companies with assets of more than $50 billion

Now, the AP doesn't always get the granular stuff right, and it could be that the White House hasn't been especially clear yet, but if the tax is on balance sheet liabilities, couldn't banks significantly reduce the amount of taxes they would pay by reducing their total liabilities and increasing the value of their equity? This would also give them much more conservative risk assessment results, and they would be much less prone to failure in the long term.

I'm not sold on the idea that this would work (as has been pointed out, banks are masters of passing on costs to their customers), but this could be the White House trying to prompt banks into taking less risky financial positions without, to take a more ridiculous idea I heard on a political blog, making a particular level of cash ratio required by law.

 

[Kitty Sinatra]

this could be the White House trying to prompt banks into taking less risky financial positions without, to take a more ridiculous idea I heard on a political blog, making a particular level of cash ratio required by law.

I'm not sure what's meant by cash ratio, and I don't know how it works up here, but one reason I've heard that Canada's banks fared better through all this crap compared to the rest of the world had to do with regulations that required a considerable cash reserve or something like that.

Our government never had to bail out any of them, and there was no talk of them breaking down. Also, they were still lending money through the whole recession (though that last may have more to do with the fact those stupid subprime mortgages aren't permitted up here)

 

[SpecialKO]

I'm no accountant, but you're more or less spot-on, Grue.

A cash ratio is an expression of risk that describes how much cash a company has on hand for every dollar of liabilities they incur at a given point in time. Liabilities cover pretty much everything a company would spend money on: depreciation, accounts payable, salaries-to-be-paid, current contracts, anything they're on the hook for. A high cash ratio means that a company can cover all it's liabilities, and so they're low-risk.

So the idea that cash-ratios be legally enforced is appealing. The problem is it's impractical, because different size companies in different industries have different needs. Start-ups have abysmal cash ratios, for example, because they're built entirely on borrowed money. Companies that sell inventory are completely different from service companies, or manufacturing companies, or restaurants. You would need a different legal limit on ratios for every industry and size, which would be a nightmare of bureaucratic proportions undertaken for only one of many indicators of financial health.

EDIT: So if the underlying idea of this tax is to try and tackle the same problem without dragging the rest of the economy into it or creating even more mountains of legislative paperwork, that's actually pretty smart. I'm skeptical it will work, since banks don't take stuff like this lying down, and I fear the Law of Unintended Consequences will rear it's ugly head, but inducing smarter behavior is always a better idea than legislating it.