Quick note to the president after reading about the administration's proposal to bail out the banks (cf. New York Times summary of the proposal). This is an unreasonable transfer of money from taxpayers to the banks.
I'd like to see the program require benefiting companies to pay significantly higher tax rates over an extended period (e.g., a hundred years). These rate increases should vary with the degree to which companies participate in the bailout.
The terms should be onerous enough that only companies truly threatened by bankruptcy will apply, fixing a couple of the proposal's worst flaws:
1.) as currently formulated, anyone owning mortgage securities can participate in the auctions, even if not threatened by financial problems. This is poor targeting, and needlessly expensive for taxpayers.
2.) the movement of money seems to be one-way to the banks. We need a mechanism to recover that money (and hopefully more) if/when the banks return to profitability. Adjusting tax rates for those companies would accomplish this nicely.
I'd like to see the program require benefiting companies to pay significantly higher tax rates over an extended period (e.g., a hundred years). These rate increases should vary with the degree to which companies participate in the bailout.
The terms should be onerous enough that only companies truly threatened by bankruptcy will apply, fixing a couple of the proposal's worst flaws:
1.) as currently formulated, anyone owning mortgage securities can participate in the auctions, even if not threatened by financial problems. This is poor targeting, and needlessly expensive for taxpayers.
2.) the movement of money seems to be one-way to the banks. We need a mechanism to recover that money (and hopefully more) if/when the banks return to profitability. Adjusting tax rates for those companies would accomplish this nicely.
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