Citigroup Loss Shows Bank Tax Bunk: Today's Outrage
NEW YORK (
) -- When I look at
Citigroup's
(C) - Get Report
earnings report, I wonder about the logic of President Obama's proposed bank tax.
Citigroup posted a $7.6 billion loss
in the fourth quarter due mostly to the $6.2 billion cost of repaying taxpayer bailout funds and exiting a loss-sharing agreement with the government.
Meanwhile.
against Citigroup and the other big banks in order to "recover every single dime the American people are owed."
The structure of the proposed tax targets the biggest banks, many of which have already repaid the American people, including
Goldman Sachs
(GS) - Get Report
,
JPMorgan Chase
(JPM) - Get Report
,
Wells Fargo
(WFC) - Get Report
and
Bank of America
(BAC) - Get Report
.
Obama is leveraging the anger over bank bonuses as a justification for his proposed bank tax, but that's backward logic because the banks paying the bonuses have have already repaid taxpayers plus interest.
Let's not forget that the Treasury Department has boasted that fees and dividends from the bailout generated more than $16 billion in revenue so far.
So on the one hand, the administration is bragging about the value created for taxpayers through the bailout and on the other hand it is pushing for a tax to cover the cost of the bailout.
Ultimately what Obama wants to do is have the healthy banks pay for the bailout of their unhealthy rivals.
That is an interesting twist on the Robin Hood theme.
Sadly, Obama won't just be robbing the rich because ultimately bank shareholders will also pay a price.
Shareholders, in case the administration has forgotten, are taxpayers too!
--Written by Glenn Hall in New York.
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