Obama Bank Tax DOA: KBW
NEW YORK (
) -- President Obama's plan to assess a $61 billion "Financial Crisis Responsibility Fee," unveiled Monday in his proposed budget to Congress, has no chance of passing, according to a research note published Tuesday by Brian Gardner, Washington analyst at Keefe, Bruyette & Woods.
"The bank tax failed to progress through Congress when Democrats control both the House and the Senate. Given the split in Congress, we think a bank tax proposal is dead on arrival," Gardner writes.
The proposed fee, which would be assessed to financial firms with assets above $50 billion, is twice the size of the one Obama proposed last year.
Despite its zero chance of passage, Gardner believes the bank tax "will remain in the media as we expect the Administration will mention it from time to time."
However, he sees "little headline risk to banks from this proposal since we think most investors doubt the bank tax will be passed."
Since the aim of the proposal is to hold banks accountable for the bailout they received following the 2008 crisis, Gardner saw "a certain irony in that the budget also noted that bank-related TARP programs have returned a profit to the government."
Banks that would be impacted by the tax include
Bank of America
(BAC) - Get Report
,
Citigroup
(C) - Get Report
,
JPMorgan Chase
(JPM) - Get Report
and
Wells Fargo
(BAC) - Get Report
, among others.
--
Written by Dan Freed in New York
.
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