January 13, 2010

Double Billing

Obama is said to be making the announcement tomorrow that he plans to charge fees to the "fat cats" in the financial firms to the tune of 120 billion dollars. It is being packaged as a tool aimed at recovering tax dollars from government-rescued financial institutions. In reality, the taxpayer paid for the bailout once and will pay for it a second time when the banks pass those fees on to you.

Businesses do not pay taxes. Banks are businesses. They are tax collectors and they recoup that revenue in some way. Higher prices (in this case fees), less hiring or they simply close their doors when the cost of doing business becomes so prohibitive that it is just not worth it anymore. Everyone who uses a bank will be paying this in some way, if not directly in the form of higher fees. If you are rich, you'll be paying. If you are poor, ditto. Just add it onto to all the other hidden taxes, fees and unmeasurable opportunity costs at the hands of a draconian government you pay.

Incidentally, I do not pay bank fees. I have not paid a bank fee, other than a fee incurred while traveling and I had no other choice, in over ten years. So, if little old me is not paying bank fees, I highly doubt the CEOs and CFOs are either. When you have enough leverage with the bank, it's funny how they will work with you to accommodate you. Also funny how it turns out to be it will those without the leverage and history with the banks who will feel this non-tax increase tax increase the most and, of course, small businesses who already are not hiring or spending.

Obama will give another prime time speech telling us how he really nailed those fat cats in the banks. The financial illiterates among us will think Obama is looking out for them in the misguided belief that Obama is finally giving it to those greedy bankers with their outrageous bonuses. The "I buy a new cell phone and spend $200 a month on lattes" simpletons won’t even notice the new and creative ways that the banks will recoup the revenue: overdraft penalties, ATM charges, etc. And who exactly will that squeeze the most? Clue: It won't be the guy with a couple of homes and a driver.

From just a glance it would just appear that Obama is economically clueless and I am sure he is. At closer scrutiny, his administration knows what they are doing and where these fees will come from. He has a promise to live up to. "If you make less than $250,000 I promise you will not see a tax increase"

He didn't raise your taxes. He stuck it to those greedy bankers. He is just sticking it to greedy Big Pharma. Just sticking it to those evil wall Street Executives or whoever the villain of the month is. This is how he gets to tax the middle and lower class, by proxy.
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