You Don't Spell Reform T-A-X

Reading through the text of the "Dodd-Frank Wall Street Reform and Consumer Protection Act” it is clear that it is “reform” in name only. It might better have been named “The Banker’s and Politician’s Job Security Act of 2010”.

Though the bill is filled with tough sounding language, it lacks specifics other than regulators will have vast additional power over our economy. It is clear that it will not accomplish the stated goal of protecting the consumer, as it places the banks that took the most bailout money in a position of advantage over the rest of the marketplace. They’re doubling down on the same kind of big government protectionism that lead to the current recession, ensuring the power of centralized banking continues to grow.

Obama was busy today at the G20 summit pushing one troubling element of the bill; the Financial Crisis Assessment Fund, Section 1601. It authorizes a newly created “Financial Stability Oversight Council” to "impose risk-based assessments” on banks and financial firms. The administration will levy a tax of 15 basis points on the liabilities of large financial firms, ostensibly to “recover” bailout funds for the taxpayer. Frankly, I’d be amazed if Obama possesses the financial know how to balance his own checkbook.

What the cult of unintended consequences fails to realize is that big business doesn’t pay taxes. This cost will be passed through to the consumer in the form of higher fees, making this a tax on you and I, not on financial institutions. Most people won’t even realize they’re being taxed.

Another day, another pound of flesh. What are you going to do about it?