Taxation for public approval
What do you do if you are a President with low approval numbers, no respect internationally, multiple failed economic plans, unpopular and unwanted Bills being pushed through Congress, and an apparent addition to spending money like an addict sitting on a warehouse of supply? If the President in question is President Obama, you lash out at anyone that is remotely less popular than yourself.
The summation of the recent proposal to tax large financial institutions for the TARP program is effectively an attempt to find more money to spend and still look good in front of voters as the troubled Obama Administration begins to ramp up efforts for the mid-term elections. There is no other reasonable way to view the proposal. Especially when the facts of the situation is considered.
Currently, several major banks and financial institutions are set to give out massive bonuses to their employees. These bonuses average in the hunderds of thousands of dollars. Many politicians (mostly Democrats) are appalled by this. The theory is that such a use of public money should never be done in this manner. Thus President Obama has announced a new tax, only for the top 50 financial companies, because of TARP non-repayments.
Now here are facts:
Consider these facts. 65% of all the TARP funds have been repaid in less than 1 year. The Government has had annualized returns in excess or 20% on some of these repayments. Many of these banks have bought back the Government interest in their stocks and are thus 100% private companies again. Several of the banks have never been involved with the TARP at all.
Add to this the fact that TARP paid $83.9 billion to the auto industry (Chrystler, GMAC, General Motors) that is expected to NEVER be repaid. The Government owns these automakers now.
Add to that the fact that the Government has already made restrictive and punative taxes on bonuses last year – which is questionably legal – that violated the law which Congress guaranteed those bonuses with.
What does this mean then?
The Obama Administration is effectively stating the following:
Once the Government owns a private company, it is unwilling to release that control
That Government requires a scapegoat to distract from the failure of the Obama Stimulus, and the unwanted Health Care Reform
That Government is willing to dictate the income of private citizens in private businesses
That Government requires new sources of income to maintain the spending spree it is indulging in
The Government is unconcerned with reducing the unemplyment figures, or preventing this new tax form being passed on to consumers
The reality is that all taxes on corporations are eventually passed on to consumures via higher fee or costs. Not to forget that any corporation that would acquire higher taxes for new employees would forgo hiring those employees until absolutely necessary to reduce overhead costs.
But even forgetting all of that. The Government is willing to penalize those that “lived up to their responsiblity” by repaying thier TARP payments, punishing those that were responsible enough not to take the TARP, and ignore those that have taken the funds and have not yet made a repayment and are smaller than the top 50. Which does not take into account the fact that the Government failed to set a timetable for repayment of TARP.
The net result is that President Obama and Democrats are looking for something to hang their hats on. Unemployment is poised to go higher than 10%. The economy is not improving for the average American. There is massive distrust of Government. The public has no desire for the biggest Bills in Congress at this time, Health Care Reform and the Cap & Trade Bill, which Democrats are forcing through anyway.
Thus, if the penalty for not taking TARP, or repaying it, is a new tax to teach responsibility in spending, what is the penalty that Congress and the Obama Admisitration should have? Because it is the Government that has spent trillions of dollars in a single year, increasing the national debt to over $12 trillion dollars. It is the Government that is planning to spend $1.2 trillion on an Health Care Reform that fails to accomplish any of its stated goals. It is Government that has spent $787 billion on a stimulus that is such a failure that another $75 biullion is being planned to be spent to stimulate the economy.
This new tax is not about TARP. It’s not even about teaching a lesson. It’s an attempt to have spme polispeak that looks good and will help re-elect politicians that have failed in thier jobs. Which is sad.
