Information

 Bank Tax

This option would tax banks based on the size of their holdings and the perceived riskiness of those holdings. Larger, riskier banks would pay more tax, both to discourage them from taking big risks and to help cover the costs of future financial crises.

• $103 billion - 2030

                        - David Leonhardt

 What is bank tax?

• Bank tax is a proposed tax on banks to prevent excessive bonuses within the system.
• Each bank will pay 0.15% of its eligible liabilities ( total assets minus capital and deposits)

1. Financial stability contribution (FSC), or "Bank tax" - 
•  A tax on financial institutions whose proceeds would bail them out of crisis rather than American tax dollars. 
2. Financial Activities Tax (FAT) - 
•  A tax on bank profits and bankers’ excessive remuneration packages, total compensation for the job you hold including salary, bonuses, and commission.
3. Financial Transaction Tax -
• A tax on a lot of different "financial instruments" including: stocks, bonds, currencies and derivatives.

Reasons to implement bank tax

• Raises up to $117 billion dollars to cover bailout loses -  large reduction in US deficit
• Repays the debt
• Compensation for damage done by banks
• Taxes on higher bonuses ( $50,000+ )
• Calmes, Jackie. "Taxing Banks for the Bailout." NYTimes. 01/14/10.
• "We need to impose a fee on the banks that were the biggest beneficiaries of taxpayer assistance at the height of our financial crisis -- so we can recover every dime of taxpayer money" - President Obama 
• Jackie Calmes is a New York Times writer who focuses on poltical articals, specifically about Obama, and the economic status in America.
• Forces shrinking of bonuses
• " The levy would raise an estimated $90 billion over 10 years, according to the White House."
• Hits the bigger banks with more than $50 billion in assets
• Bohan, Caren. "Obama calls for bank tax as next step in reform." 01/26/10.
• Financial companies with more than $50 billion in assets and hedge funds with more than $10 billion in assets will be hit with the new levy upon enactment and lasting until 2020."
• Caren Bohan is a journalist for Reuters who focuses on Obama and his political decisions.

Reasons against bank tax

• "The White House said that collecting $117 billion would take about 12 years
• Fairness - Should be other banks or other institutions as well
• Kills jobs fostered to banks
• Bailout was a mistake - should not be repaid
• Taxes will be passed onto consumers
• Evasion will cause less revenue expected
• Debatepedia. "Debate: 2010 US bank tax." 10/19/10
• Debatepedia is a reliable poltical source that gives both sides of specific changes and ideas given by the community. 

 Bowles-Simpson Plan

The deficit commission proposed a series of tax overhaul plans. Each one would reduce tax breaks for companies and individuals, while lowering tax rates. On the whole, the plans would raise revenue. One plan would cut all tax breaks other than the child and earned-income tax credits and those for mortgages, health and retirement benefits. The corporate tax would then be cut to 28 percent, from 35 percent, while individual tax rates would be cut for all brackets too.

• $175 billion - 2030

                        - David Leonhardt

 

 What is the Bowles-Simpson plan?

• The plan consists of changes from:
• Social Security cuts
• Tax reforms
• Medicare cuts
• Spending cuts
• Military Defense cuts

• There are many recommendations including:
• Raising Social Security age to 69
• Capping GDP at 21%
• Increase federal gas tax by 15cents a gallon
• Force medicare eligibility age to increase
• Eliminate earmarks
• Cut scientific research
• Reduce troops in Europe/Asia by 1/3

Reasons to implement Bowles-Simpson plan

• Brings back many troops to the United States
• Stops unnecessary payments towards NASA
• Reduce farm subsidies by $3 billion per year.
• Cancels many expensive military plans
  

  • Carpentier, Megan "Fiscal Commission Co-Chairs Simpson And Bowles Release Eye-Popping Recommendations." Talking Points Memo. 10/10/10.
  • "Their recommendations are more or less a list of the third-rail issues of American politics, including cuts in the number of federal workers[...]"
    
  • Megan Carpentier is a columnist for Talking Points Memo, where she has only posted one article based on the Bowles-Simpson plan.

Reasons against Bowles-Simpson Plan

• Increase Social Security age to 69-70 in a few years
  

  • Ruffing,Kathy "Bowles-Simpson Social Security Proposal Not a Good Starting Point for Reforms."Center on Budget and Policy Priorities (CBPP). 02/17/11.
  • "Although a plan to restore Social Security solvency will likely require both benefit cuts and tax increases, policymakers have limited room to cut benefits without causing hardship for many seniors and people with disabilities."
  • Kathy Ruffing is a senior at CBPP who spent 25 years at the Congressional Budget Office she has also worked in the Department of Labor and the Social Security Administration. She has her B.A. in economics and political science
• Increase federal gas tax by $0.15 per gallon
• Increase medicare co-pay/eligibility age
• Eliminate 200,000 federal jobs by 2020; and eliminate 250,000 federal non-defense contractor jobs by 2015
• Force airlines to increase their contributions to airline security costs and allow them to increase per-ticket security fees.
• Evasion will cause less revenue expected