Posted on 01/18/2010 7:40:25 AM PST by reaganaut1
No sooner does Washington propose a new tax than an army of experts tries to figure out ways to avoid it.
That is already the case with U.S. President Barack Obama's proposed fee on banks, designed to ensure that Wall Street banks pay up to $117 billion to reimburse taxpayers for the financial bailout: Bankers, lawyers and consultants are already considering ways to avoid paying the fee.
...
The Obama administration hopes this fee will give banks and other companies an incentive to shrink bloated balance sheets, and some companies likely will shed assets. But others will look for ways to reduce their taxable liabilities without lowering their overall asset base.
One way for that to happen could be securitization, Ely said. For example, in behavior that would be reminiscent of some of their pre-financial crisis strategies, banks could sell loans to a trust or conduit residing off their balance sheet and that entity could finance the loan.
Accounting rule makers are trying to make it harder for companies to move assets into financing vehicles and they may successfully close all loopholes linked to these types of entities, but there is no guarantee they will succeed.
Banks might also look to gather more deposits through retail brokers and private bankers, known as "brokered deposits," because those deposits would not be subject to fees.
If more large companies are competing for deposit dollars, borrowing money could become more expensive for the thousands of smaller banks that rely almost exclusively on deposit funding, analysts said.
"This tax could indirectly fall on the banks that the government is trying to support," said James Ellman, president of hedge fund Seacliff Capital.
(Excerpt) Read more at reuters.com ...
Legally trying to reduce your taxes will become the next "crime".
Does Obumbler HONESTLY believe that if he “taxes”, “penalizes”, or whatever he wants to label his fleecing of the banks, that those banks won’t simply pass those costs onto their customers in the form of higher fees, etc?
An incentive to “...shrink BLOATED balance sheets...” Yeah boy! That profit stuff is as EEEEEVIL as it gets!!! After all, it leads to employment and NOT NEEDING A GOVERNMENT BAILOUT!!! Can’t have that!
Supposedly this fee would apply to only the 50 largest banks. If so I would expect a wave of re-orgs of large banks breaking themselves up into several smaller ones (which, in the long run, may not be a bad thing)
Objective: Break the banks for good and all, reducing our capability to EVER recover from this huge and endless depression we are about to enter.
EVERYBODY will be in the breach of the law, at some time or another, because of a profusion of often contradictory statutes. There is no simple easy way to negotiate the law code, which guarantees legal counsel of continuous employment, and escalating costs just to placate what may be a hostile regime.
Once, the banking industry had the stewardship of money, to be put out at interest for the expansion of goods and services, allowing an expanding circle of humanity to enjoy the fruits of their labor. This stewardship involved prudent extension of credit, the reliable accounting of funds deposited with them, and as a repository of trusts and treasury. To enforce this trust, and assure that neither the banker nor the customer took unfair advantage of the other, the governing power had oversight, but did not act as bankers themselves, nor did the government dictate how lending could be done.
Obviously, that era is now past.
bumping and marking for later read.
Watch for bank fees for nearly everything to go up. If anyone really believes that banks will just eat these fees, they are nuts.
The hyper-corrupt Obama Regime versus the Private Sector, Venezuela/Zimbabwe/Cuba style.
If you are over drawn it might take you a few hundred to clear it up.
Banks won't pay the customers will.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.