Its hard to argue against the fairness of President Barack Obamas proposed tax on banks to recoup the costs of last years bailouts. On logical grounds, though, there is a reason to be skeptical.
Administration officials worry about a credit crunch and want banks to lend more. Banks dont lend out of thin air — they need liabilities on the other side of their balance sheets to fund new loans. The proposed tax would assess a 0.15% levy on bank liabilities (minus insured deposits.) Taxing bank liabilities after their big bailout might be fair. And as the administration notes, it might be a deterrent to banks against about taking on too much leverage and taking on unwise risks. But its not an incentive to lend, something to remember the next time theyre getting bashed for worsening the credit crunch.
It just shows, there are few easy choices in this post-crisis world, and doing what is right often works at cross purposes with doing what is good.