Financial Crisis Responsibility Fee
The Financial Crisis Responsibility Fee is a proposed tax by U.S. President Barack Obama which would act upon certain financial firms, being imposed until that financial firm had paid off all money provided to it under the Troubled Assets Relief Program. It was proposed in January 2010. The tax would only apply to those U.S. firms, or firms that received subsidies from the United States, with $50 billion or more in consolidated assets. The tax would be calculated by taking the total assets, subtracting that amount from Tier 1 capital and insured deposits, and then tax the remaining amount at a 0.15% rate.
In February 2010, the Obama Administration made an announcement in order to further justify the imposition of this tax:
"Excessive risk undertaken by major financial firms was a significant cause of the recent financial crisis. . . . The fee would . . . provide a deterrent against excessive leverage for the largest financial firms."
The Fee is still just a proposal as of October, 2011.
This proposal has received mixed support. It was endorsed in a Tulane Law Review article that evaluated it along with other financial-industry tax-reform proposals, including the Defazio Financial Transactions Tax. The author favorably noted that the plan would (1) "eviscerate . . . a preexisting tax law preference for debt financing," and (2) "discourage the [concentration of power in] massive banks." Nonetheless, the author expressed concern that the Fee would (1) increase tax-compliance costs and (2) be unfair to stockholders of the affected banks.
- Richard T. Page, "Foolish Revenge or Shrewd Regulation? Financial-Industry Tax Law Reforms Proposed in the Wake of the Financial Crisis?" 85 Tul. L. Rev. 191, 197-98, 205-14 (2010).
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