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Wednesday, February 22, 2012

Ways and Means Panel Members Call Bank Tax ‘Bad Idea’

The $61 billion bank tax in the administration’s fiscal year 2013 budget proposal is a “bad idea,” House Ways and Means Committee members Aaron Schock (R-Ill.) and Erik Paulsen (R-Minn.) said yesterday in a “Dear Colleague” letter.

“This is a bad idea for several reasons, least of which is that it’s a mistake to raise taxes as our economy struggles to rebound,” they said. “It is important to remember that $1 of bank capital can support up to $10 in lending, which means that a 10-year tax of $61 billion would result in up to $600 billion in loans that would not be made over that 10-year period.”

Schock and Paulsen also attached a Washington Post editorial to the letter that points out that the Treasury Department has turned a $13 billion profit on the bank portion of the Troubled Asset Relief Program. ABA has made similar points in explaining its strong opposition to the bank tax.

Read the letter.

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