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Baucus begins talks on Obama’s bank tax
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03/02/10 04:00 PM ET
Senate Finance Chairman Max Baucus (D-Mont.) on Tuesday said talks will take place later today on creating a tax for banks that take extraordinary risks.
“The answer is yes,” he said, when asked if the meeting would take place later today. “But not as specific as other issues; that’s in the background.”
Well-placed sources told The Hill that talks between Finance members would focus on concepts surrounding the tax, rather than on specifics for how it would work.
One issue the group should tackle is if there is bipartisan support for creating the tax.
“I’m generally very skeptical of that type of tax,” said Sen. Orrin Hatch (R-Utah), a senior Finance member who holds sway with conservative members on the committee.
Finance will likely hold public hearings on the tax later this month, which will include panelists opposing the tax. President Obama in January proposed a tax on financial institutions with more than $50 billion in assets to recoup losses from the Trouble Asset Relief Program. The levy would hit institutions taking on extraordinary risks, but excludes government-sponsored lenders Fannie Mae and Freddie Mac whose risky behavior has caused a string of federal bailouts.
Since Obama floated his tax proposal, discussions have taken place on who should pay it. Insurance companies and non-TARP recipients argue they should be exempt since they did not benefit from the bailout. But the White House has cautioned against narrowing the levy to only TARP recipients, arguing too few would be liable for it and therefore constrict the amount of revenue it could raise.
Obama seeks to raise as much as $117 billion through the tax.
Several TARP recipients like JP Morgan Chase & Co., Goldman Sachs and Citigroup have already repaid their TARP debt, plus interest, which raises the question of whether Obama’s bank tax is more a political ploy to gin up anger over banks. Opponents to the tax argue it would actually recoup bailout dollars paid to the auto industry, which remain unpaid.
Sen. Jim Webb (D-Va.) will try to harness the anger directed at banks later this week. He wants to add to legislation resuscitating several tax breaks a one-time 50 percent tax on bonuses paid by Wall Street banks. Revenue generated by the measure would go toward deficit reduction. A vote on the extender bill is expected by Friday.
“The answer is yes,” he said, when asked if the meeting would take place later today. “But not as specific as other issues; that’s in the background.”
One issue the group should tackle is if there is bipartisan support for creating the tax.
“I’m generally very skeptical of that type of tax,” said Sen. Orrin Hatch (R-Utah), a senior Finance member who holds sway with conservative members on the committee.
Finance will likely hold public hearings on the tax later this month, which will include panelists opposing the tax. President Obama in January proposed a tax on financial institutions with more than $50 billion in assets to recoup losses from the Trouble Asset Relief Program. The levy would hit institutions taking on extraordinary risks, but excludes government-sponsored lenders Fannie Mae and Freddie Mac whose risky behavior has caused a string of federal bailouts.
Since Obama floated his tax proposal, discussions have taken place on who should pay it. Insurance companies and non-TARP recipients argue they should be exempt since they did not benefit from the bailout. But the White House has cautioned against narrowing the levy to only TARP recipients, arguing too few would be liable for it and therefore constrict the amount of revenue it could raise.
Obama seeks to raise as much as $117 billion through the tax.
Several TARP recipients like JP Morgan Chase & Co., Goldman Sachs and Citigroup have already repaid their TARP debt, plus interest, which raises the question of whether Obama’s bank tax is more a political ploy to gin up anger over banks. Opponents to the tax argue it would actually recoup bailout dollars paid to the auto industry, which remain unpaid.
Sen. Jim Webb (D-Va.) will try to harness the anger directed at banks later this week. He wants to add to legislation resuscitating several tax breaks a one-time 50 percent tax on bonuses paid by Wall Street banks. Revenue generated by the measure would go toward deficit reduction. A vote on the extender bill is expected by Friday.
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