AnnotatedOpinions.com

The White House is talking about levying a tax or fee on large banks to recover the $120 billion it spent to bail out the financial system. That is a good place to start, but it shouldn’t stop there. President Obama and Congress should also impose a windfall tax on the huge bonuses that bailed-out bankers plan to pay themselves over the next few weeks.  

This is an issue of fairness and sound public policy. The Treasury needs the money. A fee may also get banks and bankers to rethink the way they do business — something the much-promised, far-too-delayed and increasingly watered-down financial regulatory reform effort is unlikely to do. A permanent tax or fee imposed on the nation’s largest banks could reduce future risks by discouraging big banks from getting even bigger. . .  

A levy on these financial giants would help by putting a brake on this consolidation — making the largest banks somewhat less profitable and steering investment and other resources into smaller banks, which, if they failed, wouldn’t take the rest of us with them. . .  

[AO: The New York Times is correct. The Treasury needs the $120 billion spent bailing out the financial system. The Times is also correct to support taxing large banks because they were the beneficiaries of the $120 billion. However, the remedy offered by the Times, bank fees coupled with taxes on bonuses, go beyond what is necessary to recoup the $120 billion. For one, the tax on bonuses is totally unnecessary if the government’s only goal is to recover spent money. By adjusting the fee amount, the government can recover the entire $120 billion without having to resort to taxing bonuses. This is a desirable approach because the bailout funds supported the banks, not individuals who work there specifically. If bonuses are taxed, the pain will be distributed unfairly so that individuals who earned the highest bonus will pay more to refund the $120 billion though there is no reason to suggest why they should be disproportionately affected.  

The Times notes with approval that a tax on big banks could help make those banks less profitable. However, any such tax must be carefully designed. If the tax is too high, it could push some of the struggling banks back into the position they were in immediately prior to the bailout.   

The government does not need to tax employee bonuses to recoup the bailout funds. If the government taxes banks only, the banks can decide how to shift those costs to employees rather than the government doing so through a tax on bonuses. ]

For much of the last eight years, the majority Republicans pushed through tax break after tax break that mostly benefited the wealthy. Now in the majority, Democratic lawmakers have failed to stop yet another tax benefit for the richest of the rich from taking effect in 2010. . .  

In 2010, the one-year repeal of the estate tax is coupled with a new tax that will hit smaller estates. That tax could affect up to an estimated 70,000 estates next year, compared with the current estate tax law, which applies to about 5,500 estates annually. If that sounds wacky, it is. It would also be harmful to many small family businesses, precisely the group that estate-tax cutters say they want to help. . .  

The Senate has failed to act. Republicans refused to consider the House bill or even a two-month delay to allow time for debate. Democrats correctly refused to consider a proposal to increase the exemption to $10 million for couples and $5 million for individuals, an unconscionable giveaway to the wealthy at a time when ordinary Americans are suffering. Compared with keeping the 2009 law, it would cost $250 billion more over 10 years. . .   

[AO: The estate tax is a tax imposed on the transfer of gifts upon death of an individual. Under Bush-era legislation, the estate tax was reduced, so that it applies to 5,500 estates annually, rather than 70,000 estates. However, included in that legislation was an agreement that suspended the estate tax for one year (2010) but resumes it at the pre-legislation level. If congress fails to act, this Bush-era legislation will run its course.  

The House has voted to continue the 2009 estate tax (which affects about 5,500 estates) permanently. In the Senate, Republicans refuse to act unless the exemption is raised from $7 million for couples ($3.5 million for individuals) to $10 million for couples ($5 million for individuals).   

The New York Times observes that allowing the current estate tax law to run its course, suspension in 2010 followed by resumption at a lower exemption rate in 2011, will be harmful to the other 64,500 estates that would otherwise remain unaffected if the 2009 estate tax is continued indefinitely. In other words, the estate tax exemption would be too low. 

On the other hand, the New York Times observes that demands by Republican Senators to increase the estate tax exemption would be “an unconscionable giveaway to the wealthy.” So, lower the exemption and the estate tax “hurts” too many people but increase it and it applies to (hurts?) too few. It’s nice to see that the Times has found legislation in which congress has set the exemption dial just right.  

Of course, there are arguments for both Republican and Democratic proposals. There are good reasons to continue the 2009 exemption (at $7 million for couple), allow the estate tax to be suspended in 2010 and resumed at a lower exemption in 2010 and, yes, even to increase the exemption as Republicans suggest (to $10 million for couple). This doesn’t mean that $10 million is the correct exemption, nor does it mean that $5 million is. Instead, whenever congress sets a fixed exemption amount that is not indexed, such exemption is worthy of subsequent revisits by Congress to ensure that the exemption remains appropriate. In that vein, the Senate should consider all options on the table that relate to the exemption amount, Democratic, republican or otherwise.]

IN A BLATANTLY political move this month, the Labor government of British Prime Minister Gordon Brown imposed a one-time, 50 percent tax on bankers’ bonuses. Yet even though it may spring from Brown’s fear of losing an election next year, the tax is justified on economic grounds and as a matter of social justice. And after France followed suit with its own 50 percent tax on banker bonuses, arguments against a similar tax in the United States lost a key rationale.  

In the past, US banking executives warned that any such taxes would make them less competitive than London or Paris in attracting and keeping “talent.’’  

The profits of US banks during the past year are exceptional because they owe so much to taxpayer bailouts and the government’s interest rate policy. . .  

So a tax on bonuses at US banks would simply give back to taxpayers some of the money they have donated to the banks. . .  

[AO: Taxpayers are rightly concerned by high bonuses paid to bankers. However, levying a 50 percent tax on bankers’ bonuses is unworkable and may be largely ineffective.  

For one, though London and Paris have instituted 50 percent taxes on bankers’ bonus, there really still are other places bankers can move to. The article suggests Zurich, Hong Kong and Singapore. These are viable options. There are others too.  

Moreover, a 50 percent tax on bankers’ bonuses is not advisable because the goal the editorial articulates, giving taxpayers back some of the money they have donated to banks, can be achieved in a better way—by retrieving the funds from the bank.   

A one time 50 percent tax leave room for companies to evade the tax by postponing bonuses or making other arrangements that delay payments or convert those payments to other types of compensation. Such a tax, if not evaded, would also disproportionately affect those who, presumably, contributed most to the economy.  

A better approach may be a one-time tax on banks themselves. Banks would be unable to avoid paying the tax. Moreover, the tax would not disproportionately affect individual employees. Instead, since the American taxpayer lent money directly to the banks, the taxpayer would be getting a refund, directly from the bank, of her donated money.]

On the charge that the “death tax’’ was a punishing money grab from small businessmen and women . . . opponents in 2001 succeeded in increasing the exemption; the tax currently kicks in on inheritances above $3.5 million rather than the old tax’s $1 million. The maximum tax rate, then 55 percent, was dropped to 45 percent.   

When the Times Square ball rings in 2010, the tax will vanish altogether. Your ticket to the great beyond is tax-free next year. But not if you survive into 2011: Because of deficit concerns, opponents had to agree that the tax would return that year, with a rate and exemption at their 2001 levels. This fiscal sleight-of-hand, disdained by all sides, has produced a yuletide debate. Should we repeal next year’s repeal to contain federal red ink, and if so, what should the rate and exemption be? Or do we just kill the tax permanently, as opponents have always urged?  

[AO: At a time of record deficits, we do not need more tax cuts. With such high national debt, record unemployment, two ongoing wars, any legislation that considers reducing taxes must be carefully scrutinized: if it is not likely to create jobs or generate revenues, the cuts should not pass. We simply cannot afford it.  

The inheritance tax is not where we need tax cuts at this time. With our sluggish economy, any tax cut should be targeted at those most likely to spend the money and by so doing generate economic activity. These are not rich people. In other words, those impacted by the inheritance tax are more likely to not spend the tax savings than most people in other groups.   

Given the options under consideration which include (1) leaving the tax as it is, (2) repealing 2010’s repeal and (3) repealing 2010’s repeal and making the current rate and exemption permanent, the third option seem least desirable in light of our current national deficits, the two wars, and record unemployment. This is because the third option would actually lower taxes over the next decade for a group that is most likely to squirrel away the tax cuts.  

The difference between the first and seconds options is the inheritance tax rate in 2010. The idea of a one-year repeal was an odd fiscal sleight-of-hand that should never have been allowed to happen. Why, after all, should we favor dying in 2010 over 2009 or worse 2010? What perverse incentives are created by this repeal? Is it fair to others that the tax is repealed for just one year?   

On the other hand, the 2010 repeal is a bargain that was reached. Yet, it seems odd to argue that there are Americans out there who are depending on the 2010 repeal and desire to die in 2010 so that they can pay lower inheritance taxes. In other words, it is hard to believe that anyone is specifically depending on this 2010 repeal.  

We need legislation that enables us to generate the revenues necessary to pay down the deficit, arrest unemployment and win two wars. We don’t need legislation that hamstrings our efforts. We need what is best for all Americans. But we don’t what to penalize those who are relying on a 2010 inheritance tax repeal. Considering our current national state and that no one is really relying on this tax repeal, it seems reasonable to repeal the 2010 repeal. ]

Death penalty in dollars: Capital punishment is capital-intensive, but we often overlook its literal cost. [Philadelphia Inquirer]  

Taxing the Chevys: The Senate’s way to fund health-care reform would hit more than “Cadillac” benefits. [Washington Post]  

Prop. 8 cuts both ways: The fight over same-sex marriage has spawned unsavory political tactics on both sides of the issue. [LA Times]  

When Kerry met Karzai: The senator showed that a polite, private push can work with the Afghan president. [Philadelphia Inquirer]  

Troop level in Afghanistan is the easy part [LA Times]  

Yellow flag on brain trauma: There is mounting evidence that the violent hits in football cause brain injuries, both dementia and concussive trauma. [Boston Globe]  

Microchips and Monopolies: If Intel is abusing its outsize clout to marginalize rivals and hinder the development of competitive products, it should be made to stop. [New York Times]  

Latest battle in book price wars: The American Booksellers Association is asking the US Department of Justice last week for an investigation into the “predatory” behavior of online retailers. [Boston Globe]  

Distracted flying: There’s simply no acceptable explanation for why two seasoned Northwest Airlines pilots cruised obliviously past Minneapolis at 37,000 feet on a flight from San Diego last week. [USA Today]   

Flight 188: Asleep at the stick? One aviator has no trouble imagining that two Northwest Airlines pilots could have been sleeping when they overshot Minneapolis. [LA Times]  

Distraction: Nightmare at 37,000 feet – The Northwest pilots who were practicing their new owner’s scheduling system on laptops while the plane overflew its destination should be fired. [Boston Globe]  

Food, Humanity, Habitat and How We Get to 2050: We need to find a way to make food and energy production sustainable in the broadest possible sense — looking out for ourselves as well as other species. [New York Times] 

When are you too old to beg for candy? [Chicago Tribune]  

On court, candor is in the air: What a difference one justice, and a TV camera, can make in opening up the Supreme Court to the people it serves [USA Today]  

Tax increases are coming because they’re necessary [Atlanta Journal-Constitution]  

Afghan success depends on understanding the enemy [USA Today]  

When ‘us’ isn’t so many: A New York congressional race may be a defining moment for the GOP. [Washington Post]  

Medicare: Only real advantage is the one insurers get [Philadelphia Inquirer]  

ICE numbers: Accurate counts on illegal detainees needed [Houston Chronicle]  

America, we’ve seen worse [USA Today]  

Clean Water: Still Elusive: The 1972 Clean Water Act has fallen well short of its goals; the time has come to strengthen enforcement and the law. [New York Times]  

Raising the debt ceiling: The Senate faces the painful duty of once again raising the limit on the national debt. [Washington Post]  

Open up Blackwater’s closed hearing: A judge’s decision to bar media and the public from a case involving the security firm’s role in the deaths of 14 Iraqi civilians is extreme and unjustifiable. [LA Times]  

Progress on Drunken Driving: Mandating ignition-interlock devices for all drunken-driving offenders is smart national safety policy. [New York Times]  

Unity doomed apartheid. Next up: climate change [USA Today]  

China leaving US behind in green energy: In contrast to a fragmented approach in the United States, China is investing deeply in renewable energy and is poised to become an unchallenged leader. [Boston Globe]  

The cars of N.Y. and L.A.: Drivers in both cities share some unique characteristics — but there is a fork in the road. [LA Times]  

Robert Mugabe vs. Zimbabwe: If the flawed power-sharing deal in Zimbabwe cannot be fixed, then new elections, supervised by the international community, must be scheduled. [New York Times]  

Iran talks we should end: A tribunal founded in settling the 1979 hostage crisis has outlived its usefulness. [Washington Post]  

Pakistan fights back: The offensive in South Waziristan is the latest sign it’s finally taking the Taliban seriously [Washington Post]  

The war on ACORN: Conservatives are distorting and playing up the community-organizing group’s so-called scandals, part of a broader effort to discredit progressive organizations and President Obama. [LA Times]  

A mother’s journey for reform: A battle begun for a chronically ill daughter to ensure insurance coverage for college students is won, but much more needs to be done for true health care reform. [Boston Globe]  

The many meanings of a cross: The dispute over a cross in the Mojave points to how entangled religion and culture are. [LA Times]

The Banks Are Not Alright: While bank trading operations are highly profitable again, the part of banking that really matters —lending, which fuels investment and job creation — is not. [New York Times]

Flight of fancy [USA Today]

Switzerland’s example of universal healthcare: Its citizens receive very good medical care. Controlling costs, however, is difficult. [LA Times] 

Oh, That Account: To curb tax evasion by the wealthy, Congress must swiftly pass tax-related legislation wrapped into President Obama’s 2010 budget. [New York Times]

Antibiotic research: the kryptonite of superbugs: Drug manufacturers have abandoned antibiotic development in favor of more commercially reliable medications, particularly ones given for chronic (rather than acute) diseases. This needs to change. [Boston Globe]

Stimulus by $250 check: The government wants retirees and others to get another $250. Why? [LA Times]  

A fiscal pacifier: Treating the elderly like spoiled brats [Chicago Tribune]  

Reawaken young voters: Will the young and hopeful abandon the political playing field to older voters who are angry? [Washington Post]  

Sudan’s state-sponsored pyromania: Militias burn rebellious villages in southern Sudan. What will the U.S. do? [LA Times]  

Europe’s angst over Afghanistan: Allies have a question: Will Obama walk away? [Washington Post]

Tackling a gruesome trade: A new report suggests some necessary steps for dealing with organ trafficking, a problem that has burst into the headlines in recent months. [Philadelphia Inquirer]

A new model for news reporting: American society must take some collective responsibility for fostering a new journalism ecosystem. [Washington Post]

The truth about Canadian health care: I’ve been treated in the American system and have lived with universal care in Canada. Guess which one is freer — and more humane. [USA Today]

Proceed with CIA abuse cases: Obama is right to give the Justice Department the option of prosecuting CIA abuse cases. [Boston Globe]

Doing nothing is not an option: What the critics of reform fail to mention is that the system will collapse without crucial changes. [LA Times]

Bottled-water scam finally feels squeeze: It’s sad that ending the bottled-water fad took a recession, when common sense should have kicked in a long time ago. [Boston Globe]

Replacing Senator Kennedy: Allowing the governor to appoint the next senator in Massachusetts would be undemocratic. They should keep the current system that allows voters to choose. [New York Times]

Seesaw Senate seats: Ted Kennedy’s contradictory replacement request underscores the need for interim appointments. [LA Times]

Elect Senate replacements: Sen. Edward M. Kennedy, who is suffering from terminal brain cancer, shouldn’t have asked the Massachusetts legislature to give the governor the ability to appoint his replacement. [Philadelphia Inquirer]

Obama should start with tax evaders: Last week, the IRS brokered a deal that requires UBS, Switzerland’s largest bank, to turn over the names of roughly 4,450 Americans who deposited over $18 billion into secret accounts to allegedly avoid paying U.S. taxes. [USA Today]

Reopening the Files: Obama’s reluctance to investigate Bush-era abuses is understandable — but wrong. [Washington Post]

Drug firms’ manufactured buzz: Universities and journals need to have strict rules against researchers signing their names to testimonials produced by drug-company ghostwriters. [Boston Globe]

iPhone vs. Google Voice: If Apple and AT & T don’t want to make it easier for a competitor, it should be their call, not the government’s. [LA Times]

Using student loans to slow tuition growth: If colleges are made responsible for a portion of student loan default costs, they’ll be more responsible in who they let in, how much they charge, and how well they prepare students for good-paying jobs that enable those students to pay off their debt. [Boston Globe]

A ‘truth commission’ on torture? [Atlanta Journal-Constitution]

The Government and the Web: The government must build robust privacy protections into any tracking technology used on government Web sites. [New York Times]

Behind Iraq’s Carnage: Without the U.S. as a backstop, the country is vulnerable to pressure from Iran. [Washington Post]

An unfair prison litigation system: A little-known federal law called the Prison Litigation Reform Act (PLRA), passed in 1996, creates a separate and unequal legal system for the more than 2.3 million prisoners in the United States. Major reforms to the law are needed. [Boston Globe]

It was some picnic: Recalling a daring dash to freedom Recalling a daring dash to freedom 20 years ago. [Houston Chronicle]

Pitching: Criminal assault, dressed up as sport: Baseball should crack down harder on beanballs. [Boston Globe]

Rapid home tests stem HIV spread [Atlanta Journal-Constitution]

The trauma of mental illness: One mother shares her fear, anger and anxiety as she fights the disease afflicting her son. [LA Times]

Tea and cacophony: Tax protesters made selves heard but face will of resolute majority [Houston Chronicle]

Tax rhetoric vs. reality [USA Today]

Funds appear to sidetrack Obama’s vision for rail: The president’s goal of high-speed passenger trains is laudable, but where’s the money going to come from? [LA Times]

How to solve the pirate problem: Raise the cost of being a pirate—in denominations of pirate blood [Chicago Tribune]

Bitter Tea Protests: Mad-as-hell demonstrators reflect a sentiment the Republicans might exploit. [Washington Post]

Right way for gay rites [New York Daily News]

Green Shoots and Glimmers: With all the talk of signs of recovery, there are still real reasons to be cautious about the economic outlook. Here are four. [New York Times]

Romantics may yet ride rails [Chicago Tribune]

Red Faith, Blue Faith: Newsweek’s story declaring the ‘fall of Christian America’ is accurate, but incomplete. [Washington Post]

Mr. Obama’s Chance to Fix the F.E.C.: Three of the Federal Election Commission’s six seats come open on May 1, providing the president an opportunity to appoint experts truly dedicated to reform. [New York Times]

Barack’s big boycott: The UN’s World Conference against Racism, known as Durban II, opens on Monday. And it appears that the U.S. will not participate. [New York Daily News]

Federal earmarks need to be tamed, not killed [News Day]

A Clear, Clean Water Act: The Obama team needs to get behind a bill to reinforce actions against developers who have been disturbing or plan to disturb once protected waters. [New York Times]

Silencing a critic: LSU firing of Katrina investigator rewards prescience with punishment [Houston Chronicle]

Stuck on Cuba: An experiment in stopping communism continues after nearly five decades of failure. [Washington Post]

Don’t let ‘tea parties’ distract from real anger [News Day]

A long line of pirate hunters: The destroyer Bainbridge is named after an early American naval officer who struck fear in the hearts of Barbary Coast predators. [LA Times]

Roxana Saberi: Iran’s government needs to release a journalist, Roxana Saberi, who was unjustly imprisoned and put an end to using innocent people as political pawns. [New York Times]

Why We Should Get Rid of the Prom: A $2.7 billion industry, and what do we have to show for it? [Washington Post]

Comrade Limbaugh: Is the right building a socialist revolution? [Washington Post]

Anti-Obama Taxpayer Tea Parties: What, exactly, are the protesters protesting? [LA Times]

Don’t forget Cuba’s prisoners [Chicago Tribune]

Payday lenders seek to avoid regulations by claiming affiliations with Midwest Indian tribes. [LA Times]

After a daring rescue, U.S. and other nations must find ways to stabilize Somalia. Somalia needs a functioning government. [Houston Chronicle]

What we need is a greater exercise of U.S. and allied power in Afghanistan, Pakistan, Iran and North Korea. [New York Times]

Baby seals: banning inhumane slaughters in Canada [Washington Post]

Does Google have the right to profit so profligately from newspaper content at a time when journalism is in such jeopardy? [New York Times]

It’s early, but I have doubts that Obama is scary enough to get what he wants. [Washington Post]

Officially sanctioned brutality against women in Pakistan and Afghanistan is a reminder of the extremism that sabotages those societies. [New York Times]