Wall Street Ready To Fight The Bank Tax

Now that the American people have bailed out the banking system and our leaders are looking at ways to recoup the hundreds of billions of tax dollars we have spent, Wall Street is starting to look at ways to get out of paying us back.

According to an article in today’s New York Times, the Securities Industry and Financial Markets Association, which is the main lobbying arm of Wall Street, sent a e-mail to the heads of Wall Street’s legal departments last week saying that the tax may be unconstitutional since it would single out big banks. They have also hired Carter G. Phillips of Sidley Austin, an attorney who is no stranger to the Supreme Court, to review the proposal and determine if it could be considered unconstitutional.

When introducing this proposal last week, President Obama sent a warning shot to Wall Street, saying: “Instead of sending a phalanx of lobbyists to fight this proposal or employing an army of lawyers and accountants to help evade the fee, I suggest you might want to consider simply meeting your responsibilities.” Now it seems like Wall Street isn’t intent on doing that and instead wants to fight their responsibilities.

This becomes another gloomy chapter in corporate America’s milking of the people. They stood with their hands out when is was time to pass out money from the stimulus, but now that the government wants to take action to recoup costs and maybe prevent further failures, Wall Street is turning their noses at us. You can just hear Gordon Gecko muttering those famous words: “greed is good.”

But to argue that the proposed tax singling out banks would make it unconstitutional really doesn’t seem to hold water. Already our tax code is peppered with provisions that single out one group and not another. A common example would be the tax credit home owners get, while those who rent are stuck paying extra every year. Or how about the tax exempt status of some churches? They can bring in millions a year and function as a full fledged business, yet the IRS can not touch them. All of these rules have stood the tests of time, so I really don’t think a challenge to this tax will be successful. Of course we do have a new court now, so there is a chance they could prevail, but would that open the flood gates to more challenges to our tax code?