Cross posted from The Stars Hollow Gazette
Seriously, you can’t make this stuff up.
Dave Camp Bank Tax Bill Would Punish Obama-Friendly CEOs
by Zach Carter and Ryan Grim, The Huffington Poat
WASHINGTON — House Ways and Means Committee Chairman Dave Camp (R-Mich.) is considering legislation that would significantly increase taxes for the nation’s largest banks while providing tax breaks to struggling homeowners. [..]
The bill would significantly strengthen the Volcker Rule, which bans banks from speculating in securities markets with taxpayer money. The Volcker Rule’s implementation has been delayed as bank lobbyists have flooded regulatory agencies in Washington, pillorying the ban with loopholes. Hefty tax burdens for proprietary trading would reduce bank incentives to engage in the risky activity.
Camp’s legislation also would permanently establish a homeowner aid plan advocated by former Rep. Brad Miller (D-N.C.), who retired this month. When banks grant homeowners mortgage relief, the IRS considers the debt-reduction taxable income. As a result, struggling homeowners can face an unmanageable tax burden. A $50,000 debt reduction can spark an $18,000 tax bill — money that borrowers struggling to avoid foreclosure simply do not have. Miller successfully lobbied to include a one-year fix on the tax policy in the fiscal cliff deal. Camp’s legislation would permanently end the tax policy.
Steve Benen at The Maddow Blog aptly notes that “hell hath no fury like a House Ways and Means committee chairman scorned” but points out Camp’s “big deal” won’t impress the bank lobby:
Camp sent an angry letter to the Business Roundtable a month ago, and now Republicans are saying if there must be new revenue, it should be “on their backs.”
How big a deal is Camp’s bill? I think it’s safe to say the bank lobby won’t be impressed.
Camp’s new bill would harvest government revenues from complex financial transactions involving derivatives, some of which figured prominently in the 2008 banking collapse. Although the 2010 financial reform legislation would curb some excesses in the derivatives market, the legislation isn’t yet fully implemented, and leaves much of the market unregulated. Financial reform advocates have urged new taxes on derivatives to deter excessive risk-taking by big banks. […]
Camp’s bill would establish a new tax regime for derivatives, requiring banks to declare the fair market value of the products at the end of each year. Any increase in value would be considered corporate income, subject to taxation. It’s a more aggressive tax treatment than Wall Street enjoys for either derivatives or for trading in more traditional securities. […]
The bill would significantly strengthen the Volcker Rule, which bans banks from speculating in securities markets with taxpayer money. The Volcker Rule’s implementation has been delayed as bank lobbyists have flooded regulatory agencies in Washington, pillorying the ban with loopholes. Hefty tax burdens for proprietary trading would reduce bank incentives to engage in the risky activity.
How serious is Camp about this? It’s hard to say at this point, though I suspect it’s mostly about posturing and political chest-thumping. Camp wants to send a message that he’s displeased and see this as a vehicle. Even if the committee chair got serious about this, I imagine other Republicans would intervene to stop its progress.
Benen thinks that in the aftermath of Pres. Obama’s reelection the business community see him as “a leader who is going nowhere” but “is reaching out to them.” At the same time they view the Republicans as untrustworthy and increasingly reckless.
But seriously, folks, the Republicans are threatening to tax the banks and help stressed homeowners as a “payback” for supporting Pres. Obama. Oh, please, let them.
ROTFLMAO
