[T]he ultimate cost of a tax or fee is not necessarily borne by the entity that writes the check to the government.
The cost of the proposed fee would ultimately be borne to varying degrees by an institution’s customers, employees, and investors.
Customers would probably absorb some of the cost in the form of higher borrowing rates and other charges, although competition from financial institutions not subject to the fee would limit the extent to which the cost could be passed to borrowers. Employees might bear some of the cost by accepting some reduction in their compensation, including income from bonuses, if they did not have better employment opportunities available to them. Investors could bear some of the cost in the form of lower prices of their stock if the fee reduced the institution’s future profits.
If you're still not getting it, please go back and review my ranting post from January on the same exact topic.
We have a problem with our government that is more than just spending... it's the lack of transparency in taxation. Right now, what in the world does taxation have to do with spending or fiscal responsibility? This year alone, our federal government will spend $1.4 trillion MORE than they take in (that's called deficit spending). So if spending were attached to taxation, we wouldn't have any problem balancing our budget! We've gotten so far out of hand with spending, though, that no amount of taxation in 2010 or beyond will balance the budget, let alone catch up on the accrued debt.
We need transparency. Without knowing where the government's revenue comes from, how can we hold them accountable? We also need a common sense law that says "No spending above tax revenue". Just an idea.
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