Monday, February 13, 2012

ABA Statement On Proposed Bank Tax

By Frank Keating, ABA President and CEO

“The banking industry strongly opposes the $61 billion bank tax included in President Obama’s budget proposal. Despite claims to the contrary, the facts on TARP are very clear: Taxpayers have profited $13 billion from their investments in banks through the program and Treasury predicts they will see a lifetime positive return of more than $20 billion. Given that non-bank programs are responsible for all of TARP’s losses, this would simply be an arbitrary tax with no regard to where losses actually occurred.

“While such a plan may make for a good political sound bite, the proposed tax would needlessly damage our economy by reducing credit availability and driving capital out of the banking industry. A 10-year tax of $61 billion means that up to $600 billion in loans would not be made over that same time period. Millions of small business loans would be in danger of not being funded, borrowing costs would likely increase and consumers and businesses would have less credit availability as the economy struggles to find its way forward.

“The industry is gravely concerned that this bad public policy will have unintended consequences that will damage our country’s already weak economy.”

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