By a fairly narrow margin of 53 percent to 47 percent, respondents to this week’s RBJ Daily Report Snap Poll oppose President Barack Obama’s proposed "financial crisis responsibility fee."
The proposed bank tax would be levied on the largest financial firms to recover "every single dime the American people are owed" for bailing out the nation’s financial sector, Obama said. Small, community banks would be exempt. The fee would apply only to financial firms with more than $50 billion in assets.
Separately, some Capitol Hill lawmakers also want a 50 percent tax on bonuses exceeding $50,000 at financial firms that received bailout money. The Wall Street Journal reports major U.S. banks and securities firms are on track to pay their employees roughly $145 billion for 2009, a record sum.
Slightly more than half of Snap Poll respondents support this proposed tax on bonuses.
Roughly 825 readers participated in this week’s poll, which was conducted Jan. 18 and 19.
Do you support President Barack Obama’s proposed bank tax?
Separately, do you support a proposed 50 percent tax on bonuses exceeding $50,000 at banks that received bailout money?
Here are some comments from readers:
By current taxation laws, large bonuses are already taxed heavily, possibly near 50 percent. The lack of large bonuses has largely contributed to New York State’s financial woes. Without large Wall Street bonuses, New York State does not collect its customary large taxation. No need to tax bonuses beyond where they are now. The Feds get their "cut," too.
—Randy White, president and CEO, J.N. White Designs
I support regulations that will instill a corporate philosophy for long-term growth over the quick profit. I am not sure this new tax will do that, and most likely the banks will pass along the cost to their customers. But these too-large-to-fail banks need to pay back what it cost the taxpayers; a lot of back door money ended up going to them to keep them afloat. Maybe it is time to use the current anti-trust laws to break the bigger banks up.
—Michael Knox, Bidders Guide
I believe this will cause the bank to take this money from the customer. We the people will end up paying for this, not the bank. Also bonuses are already supplemental pay and should be taxed at the higher rate, which is close to 43 percent now.
This should have been instituted as part of the initial package and be required for all banks, not just big ones. (I have no affiliation with any of the banks.) This is wrong.
Although I view the bonuses as unethical and immoral, punishment of success will have a demotivating effect on more than just the Wall Street crowd. We should consider how we will take the high ground rather than grovel in the muck with the carpetbaggers of Wall Street. Emotionally, we all want to lash out at those bums. Intellectually, we want to make sure this does not happen again. BTW, if you feel resolved that we need to take a pound of flesh because it will happen again, don’t cry when your other pocket gets picked. You will get what you expect.
—Bill Lanigan, Chamberlin Rubber
In no way do I trust that the taxpayer would benefit from this at all. Just one more way for the government to hinder business and put us farther away from any lasting recovery.
This is the height of bait-and-switch. The incentive for banks to pay back the loans quickly was to get the government out of their knickers. Now they get to "share" some more by paying off the loans to other banks who didn’t/couldn’t get back on sound footing enough to satisfy their obligations. The hard-working get punished for their hard work and belt-tightening. So the message is, don’t bother paying off your loans because you’ll just get taxed anyway and end up paying twice. Hey, maybe I can get my mortgage paid off this way. I’ll stop paying and the bank can raise rates on the rest of you poor schlumps that are paying on time.
—Jim Garnham, Penfield
First I think that any organization that has received any financial support from the government should pay it back with reasonable interest. That includes anyone who has received any type of payment. This should also include insurance forms and auto companies. Secondly I believe that since boards of directors are unable to rein in obscene salaries of the top executives, that a tax is a good way of getting more revenue for the government. After all, any of these people have created this problem as well as the unemployment problem with risky decisions and the move to off-shore manufacturing. The SEC should also get involved to rate these companies on performance and wages paid.
Basically, President Obama is continuing to feed his supporters who are driven by envy of the successful. There is no logical reason for this tax, except to "punish" the bankers for not behaving the way the envy crowd thinks they should. If these bonuses are too big, why should the government get this money? Shouldn’t it go to the stockholders? The government (federal and state) gets half of that bonus money in taxes already. Just another power grab by politicians, who helped create the mess in the first place. Oh! And they are continuing to create more toxic mortgages through Fanny Mae and Freddie Mac.
—Dennis Ditch, Delta Square
OK, let’s get serious. Mr. Obama’s plan smacks of socialism in the extreme. And, SELECTIVE socialism at that. Let me understand. We’re going after the banks because they’re the only bailout recipients that have made any money. Man, talk about getting even! I don’t favor the banks’ loosey-goosey policies any more than the next guy, but if we’re going to "get every last dime owed to the taxpayers," why not do something REALLY significant with the banks. Like, put some teeth into regulations that would govern the interest rates for loans and credit cards. Is 23 percent reasonable? I think not. And, require (and hold accountable) the SEC and other regulatory agencies that are supposed to protect the taxpayers. Yes, get our money back, but in a way that’s really meaningful to us dopes paying Mr. Obama’s salary and every other egotist in Washington. Taxing the banks may be justified but not when you let so many other bailoutees off the hook.
Since I was opposed to the way the bank bailout was originally structured, I’m also against further confounding taxes and programs. Federal programs with Fannie and Freddie created the housing and banking problems. Now the Feds call on themselves to solve these problems of their own making. You get more of what you incent. You get less of what you tax. Tax income, profits and success, and you’ll get less of all of them. We need more loans to create more business. Will taxing the banks get us more or less loans?
—Clifford Jacobson, WebHomeUSA.com
The first thought of any lawmaker proposing a new tax should be "Is it constitutional?" This proposal clearly is not, since it cherry-picks which banks will be subject to it and excludes other TARP recipients, such as GM. The next question should be, "is it in the best interests of the country?” Imposing a tax that will put a damper on loans during a credit crisis obviously is not. It should also be noted that the 50 percent tax on bonuses would be devastating for New York since it will cause bonuses to be reduced and consequently it will significantly reduce tax receipts in New York City and New York state. Many of these banks were forced to take tarp money originally and have since repaid it with interest.
President-elect Obama ran on a platform based on no new taxes on anyone making less than $250,000 per year. He promised to get the economy going again by supporting small business and making the loan process for banks easier. He punished companies for their large bonuses and how they did business. He mocked Fannie Mae and Freddie Mac for their business practices. Now, President Obama wants to tax everything under the sun. He wants Fannie Mae and Freddie Mac to go back to business as usual. I personally think he has gone back on his campaign promises and is literally destroying our economy with his Chicago-based back room politics. So no, I don’t support President Obama’s new taxes at all.
—Phil Turturici, Absolute Consulting
I see both of these proposals political devices to enhance Obama’s popularity without concern for their long-term effect on the U.S. economy. Obama is taking a page from the South America political play book of Juan Peron and Hugo Chavez. Do you remember a rising Hitler blaming Jewish bankers for the sad state of the German economy? Create scapegoats to hide the fact that government mismanagement of popular government policies (deficit spending, mortgage deductions, Freddie Mac …) are at the root of our problems. This kind of populist politics historically brings on economic decay and disaster.
Yes and no. It’s an appealing concept, but where will they turn to recover the recovery fee if you will? "What’s ours is theirs and what’s theirs is theirs."
I am a free-market advocate, and hence I have a fundamental problem with government intrusions into the private sector. I remain against "bailouts," the way the government compromised our bankruptcy laws relative to auto manufacturers, and now its efforts to dictate how to compensate employees. In my opinion, this is a blatant attempt to distract us from the health-care debacle. If a bank has paid back what it borrowed with interest, why should we interfere with how they compensate employees? This sounds more like an issue for the shareholders. Maybe we should focus on trying to get back some of the money we "loaned" the auto companies.
Even if TARP money is repaid, they owe. The billions lost in 401(k)s and pension funds, including New York’s public pensions, have not been repaid. The damage done to global capitalism and Main Street from their casino, crony capitalism has not been repaired. They have also not lowered interest rates even though the Fed is giving them money for zero to .25 percent interest. Real accountability is owed.
—Jim Bertolone, AFL-CIO
Any tax is a tax on the people, paid by the people. This a corporate board/investor issue. The government needs to bring this compensation issue to the boardroom as an investor and educate the public sector.
—Bradley Moyer, ROC IT Solutions
No more taxes. No more foolish spending. No more incompetence. This is insane.
—Vinny Dallo, financial planner, Legacy Financial Planning, an office of MetLife
Any way you cut it, we don’t win. But before bonuses are paid, I would think the debt should be repaid.
No. 1: The bank tax should only apply to banks that received federal bailout loans. No. 2: 50 percent tax is too high. I would support a lower tax on banks who give out bonuses more than $50K. This would be similar to the luxury tax in major league baseball. Once the bailout money is paid in full, the tax should no longer apply.
— Mike Guche, Canfield & Tack, Inc.
It’s only fair that the entities that created the financial meltdown pay back all the bailout money, but also make restitution for their greedy, selfish, manipulative ways. How will they ever change if they don’t feel real pain for staying the same? If they try to pass on the costs, higher punitive fines should be added along with increased oversight. They’ve done nothing to help small business, the unemployed are not back at work, individual investments have not been recouped and very few of the perpetrators are being prosecuted, and they want bonuses? If they feel some pain like the rest of us, it’s a good thing.
The banks should have been allowed to fail. They continue to abuse the system, and the government is a sucker for punishment. Take your money out of the big banks and get it into local banks and credit unions! That may teach them more of a lesson than some minor tax.
Many of the banks that received bailout money didn’t want it to begin with. They were forced to take the money. Some of them have also already paid that money back with more than 10 percent interest. Therefore, I believe it is unfair for them to be taxed even further for being good at what they do. Perhaps our bloated government should look within to find money to pay for the bailout instead of private companies which exist to make money for their investors, not the government.
—Tom Meilutis, J. Fiorie & Co.
Haven’t most banks already paid back their TARP monies with interest? Hasn’t the government been saying for months that banks need to be better capitalized and to make more loans? Won’t paying the bank tax make it harder for the banks to retain capital and to make more loans? Seems like the president is more interested in making a political statement than in actually helping the banks get back on sounder footing.
—Doug Lyon, Lyon Capital Management
Taxing those who are the most successful will not lead to a productive or healthy business climate. To the contrary, those who make bonuses higher than $50,000 should be taxed less so that they can spend their earnings to drive the economy.
—Alphonse J. Sasso
We need more incentives for business expansion, not more taxes. The responsibility for ethical and prudent business management rests with the boards of directors of these companies, not with the government.
—Robert Zinnecker, Penfield
No! Stop taxing businesses!
The taxpayers should be repaid for the bailout money given to financial institutions. This can be done by requiring the affected institutions to repay the funds. Obama’s proposal is just another tax that once it is on the books will stay there forever. Banks need to lend. Taxing them this way on the amount of assets they have discourages capital growth and formation. It is counter to the objective. The ancient Romans used to tax all unmarried people under the age of 50 (to encourage them to get married). Don’t tell Obama, because it will give him another idea to pursue to burden America with more taxes.
—Mike Kaser, Penfield
It’s astounding to me that the president and our lawmakers continue to shift blame instead of admitting that the financial meltdown was the result of failed government policy. The banks and Wall Street are simply government scapegoats.
—R. Canley, Fairport
Yes, we deserve to get the money back. I’m glad it helped our banks to stay afloat last year, but now that they are solvent, there is no reason our money should stay in their very deep pockets, and help the rich to just get richer. In our lifetime, we taxpayers will never enjoy the kind of money provided by such bonuses. Perhaps any money recouped can be put back in the economy by lowering taxes on low-income families, or sharing another stimulus with us peasants.
Let’s see if I understand this. Our tax dollars went to poorly run businesses to bail them out. Now the government wants to tax those businesses which will only pass the higher cost on to their customers in fees or increased bank charges. Seems like the taxpayer is paying twice for the poor management, while those same managers are getting paid bonuses. Oh, I forgot. They will get taxed 50 percent. Still 50 percent more than they deserve.
—Jerry Valentine, Surmotech
Our government has got to stop raising and implementing new taxes and fees. They should cut spending and get rid of the "social" programs.
The president’s plan will only result in higher fees to the consumer. President Obama has now stated that banks and health insurance companies are bad and they and everyone who associates with them should be punished. By President Obama’s fourth year will any part of our capitalistic society, which is how our great nation was built, be considered good by government standards? The government, which does not create jobs, has done more damage to our society in the last nine years than the insurance or bank industries combined.
—J. Kevin Best, president, Best Times Financial Planning
The very people at the heart of the collapse haven’t lost a beat (i.e. hurt financially), time to pay a fraction of what they should have paid.
—Peter Bonenfant, Fairport
Any taxes or fees levied against banks will be passed on to their customers. Most of the banks have paid back their bailout money. I would certainly support preventing any banks (and car companies) that have received bailouts from granting ANY bonuses until they have repaid those funds with interest. Maybe we need to consider preventing mega-mergers so we don’t create companies that are "too big to fail."
—Karen Zilora, Creative Scanning Solutions, Inc.
I don’t think that taxing a subset of the industry is the answer. If the theory holds true that the TARP funds saved the industry then the whole industry should pay. But mainly, I don’t think that taxing is the answer to anything. The solution should be that failure is a real consequence. When that element of business is removed then we have the problems of worrying about who is getting bonuses.
—Tim Willman, Ajilon
The proposed taxes are aimed at making taxpayers whole. They do not address the root cause of the problem. That is, the large financial firms created this financial crisis. These firms became so large that the U.S. government could not afford to let them fail. The actions taken to avoid financial ruin have made the financial firms even larger and thus we taxpayers are under more pressure to keep them from failing. I say enough! The large financial firms should be split-up to separate commercial banking from investment banking. This business model worked well for many years. Allowing banks to perform both functions was an experiment that has not worked. The law requiring separation of commercial and investment banking should be reinstated.
Problem with the "bank tax" is that it is extremely unfair! Among others, it taxes banks that received NO bailout money and fails to tax organizations that … did! I mean, this is so unfair that it smacks of incompetence or even worse —corruption.
—Jerry Lighthouse, C.P.M., CPIM Advanced Purchasing Technology, LLC
On top of that I would add at least 29.99 percent interest on the loans regardless of their payment history, credit rating, or ability to negotiate or accept the terms and conditions without negatively affecting their credit rating.
Who does the president think ultimately pays these taxes? Although they are imposed on the banks, they will ultimately be passed onto the consumers and citizens. And when and how will the automobile companies pay back the assistance they received? Why is it okay to tax one segment of the economy and not another? The TARP money was ill conceived from the start and now this administration is trying to impose taxes on America when we are still trying to recover from a recession. When will they understand we cannot tax ourselves to prosperity?
—Keith B. Robinson, CFO, Diamond Packaging
This is a ridiculous concept.
—Mark Davitt, ConServe
My only concern with this tax is if the banks turned around and tried to recoup it from we consumers by raising our interest rates or levying some other fee or penalty on us.
—Joanne Greene-Blose, The Project Solvers of America, Inc.
The leadership of our financial institutions got us into this economic mess. Their institutions profited hugely due to the bail-out. The improvement of the economy was done by the tax payers, and they must be rewarded appropriately. Since the financial leaders did not cause the improvement in the economy and their institutions, they don’t deserve any bonuses or pay raises. Thus, it is time to correct the award system. How many people who worked diligently through this crisis did not get wage increases? Or how many were laid off and are suffering? Who is paying for their unemployment? Weren’t the financial institutions the cause for their loss of work? Should they not now pay for what pain they caused? Why should the workers of this country pay their taxes for the disasters that these people caused while they claim un-earned bonuses and pay raises? It is high time that this country returns to some civility and fairness, and the basic capitalist concept that income should be earned, and not be acquired by robbing?
—Ingo H. Leubner, Crystallization Consulting
Whatever way the taxpayers get their money back, great!
—Hutch Hutchison, In T’Hutch Ltd.
Financial firms that received bail out money engaged in practices that precipitated the crisis. Underwriting the financial sector to prevent further collapse made sense. Allowing these same firms to ignore the ripple effect the crisis and the bailout placed on the American people is to allow the firms to ignore addressing the issues and decisions that jeopardized the US economy. These taxes should come out of profits and bonuses. The 50 percent across-the-board tax does not allow for the fact that some of those receiving bonuses are the very people who pulled the institutions out of crisis. The people who have taken on the task of rebuilding financial firms after the "culprits" have fled need not be "punished for the sins of their fathers." Bonuses are an incentive to do excellent work. The bonuses of those who have "saved" the day need not be taxed at the same level of those who drove the devastation. The fact that the bonuses are at record levels is witness to the need to put performance based controls into play. A financial firm that works to limit foreclosures and provide new terms to those who are facing issues, a firm that negotiates loans for secured investments, etc. need not be under the same rules of those who charge exorbitant fees or forecloses on people willing to negotiate more workable loan terms. Limit or tax bonuses based on performance of the institution and the individual.
—Donna Cullen, CSUMC
Hard to know whether the banks will just increase interest rates on credit cards like they did recently to make money to pay off TARP funds. While folks who worked smart and made some of the funds that helped the banks move toward solvency deserve fair bonuses, I have never worked for a company that paid bonuses when they lost money, much less, contributed to the devastation of the economy.
—Jim DeLuca, Abundance Cooperative Market
President Obama doesn’t get it and/or he has a socialist agenda. Lowering of taxes is needed in a recession recovery not increasing taxes. Not only does this tax affect those banks which took bailout funds, it applies to large insurance companies that did not. The president is losing his grip, and his poll numbers reflect it.
—John Rynne, president, Rynne, Murphy & Associates, Inc.
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