The Obama Administration’s favoritism towards its political allies is glaringly obvious. They want to impose a “Financial Responsibility Tax” on banks, but they are willing to give a pass to the automakers who have benefited from TARP and have yet to repay the American tax payers. Here is an excerpt from the Wall Street Journal:
The real TARP losers—General Motors, Chrysler and delinquent mortgage borrowers—are exempt from the new tax. Why the auto companies? An Administration official told the Journal that the banks caused the crisis that doomed the auto companies, which apparently were innocent bystanders to their own bankruptcy. The fact that the auto companies remain wards of Washington no doubt has nothing to do with their free tax pass.
Also exempt are Fannie Mae and Freddie Mac, which operate outside of TARP but also surely did more than any other company to cause the housing boom and bust. The key to understanding their free tax pass is that on Christmas Eve Treasury lifted the $400 billion cap on their potential taxpayer losses expressly so they can rewrite more underwater mortgages at a loss.
In other words, the White House wants to tax more capital away from profit-making banks to offset the intentional losses that the politicians have ordered up at Fan and Fred. The bank tax revenue will flow directly into the Treasury to be spent on whatever immediate cause Congress favors. Come the next “systemic risk” bailout, taxpayers will still be on the hook. “Responsibility” is not the word that comes to mind here.
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