Capitol Confidential

It’s amazing to watch the civil libertarians hide when Democrats propose the most sweeping intrusions of privacy in generations. In addition to the litany of bad policies contained in the Dodd Financial Reform bill is this nugget on pages 1039-1040. In short, it extends government reach to every deposit account of every citizen.

Subtitle G of the Dodd discussion draft bill requires that records be maintained and reported “for each branch, automated teller machine at which deposits are accepted, and other deposit taking service facility with respect to any financial institution, the financial institution shall maintain a record of the number and dollar amounts of deposit accounts of customers.”

What’s worse, banks will be required to submit these records to the new super regulatory agency called the Consumer Financial Protection Agency (page 1041). The CFPA will be allowed to use this information for any purpose “as permitted by law” under CFPA rules—rules set by CFPA themselves.

So, lets get this straight—the law requires banks to snoop on its customers MOST PERSONAL INFORMATION and submit it to another government agency so it can be used anyway the CFPA see’s fit.

So, if the CFPA Czar see’s fit, information about your deposit account activity could be shared with the IRS, immigration officials, state officials, or any other entity that the Administration and their various Czar’s think beneficial.

But CFPA will impact your life even before they give away your personal data. Remember that part of the excuse for including this authority is to make policy recommendations. So, be careful not to run your credit limit too high above the amount of money you are depositing in the bank or the CFPA will know you can’t pay your bills and make the appropriate “policy recommendations”.

This is exactly why conservatives have fought so hard against things like national ID cards—if the government is authorized to collect and utilize data, there is no way to prevent the government as a whole or certain individuals within the government from using the information against the citizens.

But passage of the CFPA will settle the whole ID card thing once and for all. There will be no need for them because if you have a bank account, you already have a number and the CFPA will have it.

The breadth of sweeping new powers given to the federal government by these three pages is astonishing. Yet we have heard nary a peep about this provision.

After capitulation and surrender, Republicans will have a chance to amend the legislation when it comes to the floor of the Senate and protect the private details of your banking account.

But if they don’t, smile the next time you go to the ATM because Big Brother will be watching.

Source

By CHARLES BABINGTON
AP

WASHINGTON – President Barack Obama suggested Wednesday that a new value-added tax on Americans is still on the table, seeming to show more openness to the idea than his aides have expressed in recent days.

Before deciding what revenue options are best for dealing with the deficit and the economy, Obama said in an interview with CNBC, “I want to get a better picture of what our options are.”

After Obama adviser Paul Volcker recently raised the prospect of a value-added tax, or VAT, the Senate voted 85-13 last week for a nonbinding “sense of the Senate” resolution that calls the such a tax “a massive tax increase that will cripple families on fixed income and only further push back America’s economic recovery.”

For days, White House spokesmen have said the president has not proposed and is not considering a VAT.

“I think I directly answered this the other day by saying that it wasn’t something that the president had under consideration,” White House press secretary Robert Gibbs told reporters shortly before Obama spoke with CNBC.

After the interview, White House deputy communications director Jen Psaki said nothing has changed and the White House is “not considering” a VAT.

Many European countries impose a VAT, which taxes the value that is added at each stage of production of certain commodities. It could apply, for instance, to raw products delivered to a mill, the mill’s production work and so on up the line to the retailer.

Read full article

Money News

President Barack Obama’s Democratic allies in the Senate promise to cut the deficit by almost two-thirds over the next five years, but their budget plan could threaten about 30 million people with tax increases averaging $3,700 in 2012 and after because of the alternative minimum tax.

The alternative is tax increases elsewhere in the revenue code averaging up to $100 billion a year after 2011 to continue alternative minimum tax relief and also curb taxes on people inheriting large estates.

The Democratic plan released Wednesday by Senate Budget Committee Chairman Kent Conrad of North Dakota relies on such boosts in revenues to carve the deficit from $1.4 trillion last year down to $545 billion by 2015.

The minimum tax, or AMT, was enacted four decades ago to make sure wealthy people couldn’t avoid taxes altogether.

But it wasn’t indexed for inflation in people’s incomes, so it gets “patched” every year or so in order to prevent people from being surprised by multi-thousand-dollar tax bills at tax time.

Estates larger than $7 million would also be threatened with higher taxes after 2011 if Conrad’s plan is carried out.

Conrad says lawmakers will have to find revenues elsewhere in the budget to pay for AMT and estate tax relief after 2011, which could require tax increases averaging up to $100 billion a year elsewhere in the code if Congress is going to keep its promises under tough new budget rules.

Conrad says he hopes the dilemma will force Congress to overhaul the complicated and inefficient U.S. tax code. The Tax Policy Center, a joint project of the Brookings Institution and the Urban Institute, says that 33 million taxpayers would face the AMT in 2012, adding $3,700 on average to their tax liabilities.

Extending AMT and estate tax relief would cost $300-$400 billion over 2012-2015, Conrad said. Many observers say it’ll be virtually impossible for Congress to produce offsetting revenues to extend the tax relief. GOP Sen. Judd Gregg of New Hampshire predicted that when Congress confronts the problem in two years it will blink and simply borrow the money as it has done in the past.

The looming tax hikes result from the structure of President George W. Bush’s 2001 and 2003 tax bills, whose provisions generally expire at the end of this year. Obama promises to fully extend them except for individuals earning more than $200,000 a year and couple making $250,000 a year. They include lower income tax rates, a $1,000 per-child tax credit, and tax breaks for investments and reductions in the estate tax, and their five-year cost of almost $800 billion would be covered by adding to the nation’s $12.8 trillion debt.

But in the case of the AMT and estate tax, congressional Democrats have broken with Obama and promise that after two years of deficit-financed alternative minimum tax and estate tax cuts, Congress will have to come up with the money.

Read full article

Tara Perkins

Globe and Mail update

Finance Minister Jim Flaherty says he will be adamant about opposing a bank tax, even after the IMF has come out in favour of one.

“Canada will not go down the path of excessive, arbitrary or punitive regulation of the financial sector,” Mr. Flaherty said.

He said the government does not want to see financial institutions in this country penalized because of their relative success and their stability during the course of the crisis.

The Finance Minister’s comments, which he made in Toronto Wednesday morning at a Euromoney conference, show that he is prepared to battle his G20 counterparts over the creation of a bank tax even as support for the idea grows.

Mr. Flaherty noted that the idea of taxing banks has gained support among many European countries and in the U.S.

Their view is that the levies would penalize institutions that triggered the global recession and create a cushion against future crises, Mr. Flaherty added. The idea is to create a pool of funds that could be tapped to help pay for future bailouts.

Mr. Flaherty said he agrees that taxpayers should not be on the hook for the costs of bailing out financial institutions.

But he says a tax is not the best way to ensure that. A tax could weaken banks’ ability to absorb loan losses, and could also result in excessive risk-taking because of the perception of a government guarantee against bank failures.

Read full article