FacebookTwitterGoogle+RedditEmail

Don’t Tax the Banks, Break Them Up

A number of “tax the banks” measures are being pushed by liberal pundits to pay to maintain social spending or to pay for future bank bailouts. These efforts ignore that taxpayers are still subsidizing the banks and that the banks continue to engage in socially destructive practices. In current circumstances adding taxes only gives a patina of legitimacy to the taxpayer-subsidized revenues that the systemically dangerous banks garner.

One suggestion making the rounds is that in order to offset the cuts in social spending soon to be recommended by Barack Obama’s “super-committee,” that banks pay a transaction tax on their financial transactions. This suggestion accepts the false premise that the bipartisan effort to cut social spending is driven by a shortage of government money to pay for these programs. Between the government’s ability to create money as needed, continued heavy spending on unnecessary wars and corporate subsidies and the deep pool of taxable resources held by top income earners, there is no fiscal emergency that warrants cuts in social spending. There is just the lack of political will to put the money into social spending.

A tax to pay for future bank bailouts suggests that the costs of the regular economic crises caused by the banks are limited to the amount of bailout money required to restore the banks to a position to create the next crisis. The true global costs are in the lost economic production, wealth destruction and the mass unemployment that these crises produce. Were the banks to be taxed on these true costs they would cease to exist immediately. Additionally, because of the too-big-to-fail doctrine any tax on the banks would simply refund a portion of the subsidy that taxpayers are currently providing them. The more transparent route than a tax would be to end the too-big-to-fail subsidy.

The way to deal with unneeded cuts in social spending is to address them directly for what they are. If Democrats and Republicans want to join hands to cut Social Security, Medicare and Medicaid then the temporary gloss of a bank tax is a temporary gloss and will more likely facilitate these cuts by giving culpable politicians cover. And if the costs of bank bailouts are only a small portion of the costs of the economic crises that the banks create then either render them incapable of creating economic crises or charge them the full costs to clean them up. Being party to the banker fiction that restoring the banks is all that matters only serves to restore the bankers.

Rob Urie is an artist and political economist in New York.

 

 

More articles by:

Rob Urie is an artist and political economist. His book Zen Economics is published by CounterPunch Books.

December 17, 2018
Susan Abulhawa
Marc Lamont Hill’s Detractors are the True Anti-Semites
Jake Palmer
Viktor Orban, Trump and the Populist Battle Over Public Space
Martha Rosenberg
Big Pharma Fights Proposal to Keep It From Looting Medicare
David Rosen
December 17th: International Day to End Violence against Sex Workers
Binoy Kampmark
The Case that Dare Not Speak Its Name: the Conviction of Cardinal Pell
Dave Lindorff
Making Trump and Other Climate Criminals Pay
Bill Martin
Seeing Yellow
Julian Vigo
The World Google Controls and Surveillance Capitalism
ANIS SHIVANI
What is Neoliberalism?
James Haught
Evangelicals Vote, “Nones” Falter
Vacy Vlanza
The Australian Prime Minister’s Rapture for Jerusalem
Martin Billheimer
Late Year’s Hits for the Hanging Sock
Weekend Edition
December 14, 2018
Friday - Sunday
Andrew Levine
A Tale of Two Cities
Peter Linebaugh
The Significance of The Common Wind
Bruce E. Levine
The Ketamine Chorus: NYT Trumpets New Anti-Suicide Drug
Jeffrey St. Clair
Roaming Charges: Fathers and Sons, Bushes and Bin Ladens
Kathy Deacon
Coffee, Social Stratification and the Retail Sector in a Small Maritime Village
Nick Pemberton
Praise For America’s Second Leading Intellectual
Robert Hunziker
The Yellow Vest Insurgency – What’s Next?
Patrick Cockburn
The Yemeni Dead: Six Times Higher Than Previously Reported
Nick Alexandrov
George H. W. Bush: Another Eulogy
Brian Cloughley
Principles and Morality Versus Cash and Profit? No Contest
Michael F. Duggan
Climate Change and the Limits of Reason
Victor Grossman
Sighs of Relief in Germany
Ron Jacobs
A Propagandist of Privatization
Robert Fantina
What Does Beto Have Against the Palestinians?
Richard Falk – Daniel Falcone
Sartre, Said, Chomsky and the Meaning of the Public Intellectual
Andrew Glikson
Crimes Against the Earth
Robert Fisk
The Parasitic Relationship Between Power and the American Media
Stephen Cooper
When Will Journalism Grapple With the Ethics of Interviewing Mentally Ill Arrestees?
Jill Richardson
A War on Science, Morals and Law
Ron Jacobs
A Propagandist of Privatization
Evaggelos Vallianatos
It’s Not Easy Being Greek
Nomi Prins 
The Inequality Gap on a Planet Growing More Extreme
John W. Whitehead
Know Your Rights or You Will Lose Them
David Swanson
The Abolition of War Requires New Thoughts, Words, and Actions
J.P. Linstroth
Primates Are Us
Bill Willers
The War Against Cash
Jonah Raskin
Doris Lessing: What’s There to Celebrate?
Ralph Nader
Are the New Congressional Progressives Real? Use These Yardsticks to Find Out
Binoy Kampmark
William Blum: Anti-Imperial Advocate
Medea Benjamin – Alice Slater
Green New Deal Advocates Should Address Militarism
John Feffer
Review: Season 2 of Trump Presidency
Rich Whitney
General Motors’ Factories Should Not Be Closed. They Should Be Turned Over to the Workers
Christopher Brauchli
Deported for Christmas
FacebookTwitterGoogle+RedditEmail