A Snake Oil Sales Pitch for President Obama’s Bank Tax

Mike Brownfield /

It must not be easy being Treasury Secretary Timothy Geithner, these days.

His latest task is to sell a skeptical Congress on the Obama Administration’s $90 billion bank tax with something of a convoluted snake oil sales pitch. He tried to make his argument to the Senate Finance Committee on Tuesday.

You see, Geithner explained, “Banks should bear the costs for bank failure,” and the tax is really a “too-big-to-fail tax” designed to recoup funds used to bail out banks under the Troubled Asset Relief Program.

Unfortunately for Geithner, that went over about as well as trying to sell a ketchup popsicle to a woman in white gloves. And with good reason.

Here’s why. The banks who received bailout funds already repaid the government, so the very premise of the tax is null and void. Then there’s the fact that those who haven’t repaid their bailout funds – Fanny Mae, Freddie Mac, General Motors and Chrysler – don’t have to pay the tax. And the worst feature? Consumers will bear the brunt of the tax, according to the Congressional Budget Office.