By DPA,
Washington : US President Barack Obama is considering a tax on large banks bailed out with government money, media reports said Tuesday.
The idea was to recover as much of the losses as possible from a $700-billion bail-out fund set up to rescue US banks in 2008, officials told The New York Times. The losses were estimated as high as $120 billion.
The new taxes, or fees, could be included in the budget Obama is to submit to Congress in early February, The Washington Post and Bloomberg financial news service reported.
The details of the plan were not yet finalised but expected to include a levy on financial institutions according to their size and the risk levels of their activities, officials who spoke to the newspapers on condition of anonymity said.
The revenues would be used to reduce the US budget deficit, which surged to $1.4 trillion last year, its highest since World War II. The penalties were also seen as a way to discourage excessive risk-taking by banks in the future.
“The president has talked on a number of occasions about ensuring that the money that taxpayers have put up to rescue our financial system is paid back in full,” White House Press Secretary Robert Gibbs said Monday. He did not comment on Obama’s budget plans.
The tax was also expected to help appease US taxpayers angry at the banks’ state-aided return to profitability and the reappearance of bonus payments for executives while unemployment continues to rise. Profits at finance companies have rebounded and might triple by 2011, according to a survey conducted by Bloomberg.
Goldman Sachs Group Inc, which received bail-out money from the government but has been paying billions of dollars in bonuses to employees, could soon require its workers to donate a certain percentage of their income to charities to improve its public image, The New York Times reported Monday.
Previous plans to recover some of the bail-out money through a transaction tax or a tax on bonuses were rejected by the administration.
Its new plan faced criticism. Edward L Yingling, president of the American Bankers Association, warned that a levy on large banks would “decrease their ability to lend.”
Speaking to the Times, he added that Obama had recently urged bankers to ease restrictions on loans to small businesses.