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A new tax on bank customers?

January 12, 2010

TaxGrrrl and Peter Pappas report that the IRS is considering a new tax on banks. It's not clear what it will be, but the Wall Street Journal says:

One option under consideration involves placing a fee on a bank's liabilities, a number that theoretically represents the amount of risk a bank takes on, according to officials familiar with the matter. That approach would also have the effect of tamping down banks' risky behavior, another administration goal. Another option would be to target bank profits, these people said.

Bank "liabilities" is another way of saying "customer deposits." That means a tax on you. TaxGrrrl gets it right:

I can’t imagine that this looked all that good on paper… Apparently, in an effort to recover the TARP money from banks and other groups that the White House is anticipating won’t actually be paid back to taxpayers, they’re going to tax the banks, who will likely pass along the tax to taxpayers – to make sure that taxpayers get paid back.

Hmm. The banking industry is tottering, so we'd better tax it so that we can bail it out!

Tags: dumb.Peter Pappas.tax policy.TaxGrrrl.