http://www.washingtonpost.com/wp-dyn/content/article/2008/11/09/AR2008110902155.html "It was a shock to most of the tax law community. It was one of those things where it pops up on your screen and your jaw drops," said Candace A. Ridgway, a partner at Jones Day, a law firm that represents banks that could benefit from the notice. "I've been in tax law for 20 years, and I've never seen anything like this." More than a dozen tax lawyers interviewed for this story -- including several representing banks that stand to reap billions from the change -- said the Treasury had no authority to issue the notice. "To those to whom much is given - much more should be taken any way possible..." Banks have privatized the Treasury.
Paulson is a pretty sharp guy. This was a clever move. Congress is shaping up to be a spectacle of bumbling doddering old fools when it comes to policy and money. While Congress slipped in a repeal of excise tax on wooden arrows Paulson slides in billions in additional tax breaks for banks. lmao.
Reason why frd and govt all these institutions is because they are tax havens for them. Otherwise U.S. govt would go bankrupt and not the people. Think about it you hire 100,000 people and tax all of them perfectly. While it makes it much harder in private sector next move is electronic currency this way you can tax everyone.
What about getting rid of all corporate tax and offsetting lost revenues with increased personal taxes (and tax the rich the most ..) ? Then to stimulate capital investment (since investment results in a multiplier growth in the economy) instead of hoarding of capital, give some sort of percentage kickback for funds invested. And perhaps for those who have enormous amounts of capital sitting unused, tax cash hoards over a certain size. ie any cash/cash-equivalent balance above 1B (or some arbitrary amount depending on the sector) 2.5%/yr. Capital investment and plant improvement (not financial asset investment) might be rewarded 2.5% or even 5% of the balance. Imagine the capital inflows that we would experience with this all considered.
lets say they didnt made this tax break possible. bank failures would virtually certainly be higher and this would lead to FDIC losses and bailouts, the tax payer would pay the bill anyway
Like I said, socialism for the rich. I wish I can do the same thing. Acquire BK people's lost and itemize it against my income.
None of this gets a mention in the pop media. What will get mentioned continuously in a few months will be the need to raise taxes on the individual because, "the crisis is so much worse than we thought...."
Since Congress levies taxes, there is some question whether Treasury had the authority to repeal the tax. But now we know why he wanted unfettered power and freedom from prosecution for anything he did...
Not in a free market. But the US is no free market. This is just like the Japan banking crisis, prop up the banks. What a shame!