Academic journal article ABA Banking Journal

Create Jobs, Not Taxes

Academic journal article ABA Banking Journal

Create Jobs, Not Taxes

Article excerpt

"The state of our Union is getting stronger," President Obama told Congress and the nation in his State of the Union address earlier this year. In support of that he added, "In the last 22 months, businesses have created more than three million jobs."

Yet, just a few weeks later, the President proposed a ten-year, $61-billion tax on the banking industry that threatens the very job creation he was welcoming.

We are told that this tax only would be imposed on the very largest banks. However, whatever is imposed on the large banks trickles down to all banks. Just look at the Consumer Financial Protection Bureau. We now know it is embarking on a study of overdraft practices that will affect all banks. Its coming regulations on mortgages, likewise, will affect all banks. Saying that something only will apply to large banks is a false premise.

Why would the administration propose a bank tax when economic growth is so important? The official explanation: The tax is intended to recover the Troubled Assets Relief Program's (TARP) expected costs.

Yet, ironically, about a week before the president announced his budget proposal, the Treasury Department said taxpayers already recovered $13 billion more than the $245 billion of TARP invested in banks. "The banks paid the money back, with interest," declared a Washington Post editorial.

ABA is fiercely opposing this bank tax, and our message is being heard. This tax is not only unjust, unfair, and unnecessary, it comes at a time when the economy needs more lending to create jobs, not less. …

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