Scott Brown's Strange Populism

More

>There is a theater-of-the-ironic element in Scott Brown's "victory" on the bank tax. He successfully removed from the financial bill a $19 billion tax on banks with more than $50 billion in assets and on hedge funds with $10 billion or more. Instead, about half the revenue to pay for reform will come from a stealth tax -- in the form of higher FDIC deposit insurance premiums. (The required ratio of cash to expected exposure will increase 20 basis points from 1.15 percent to 1.35 percent.)

One key banking lobbyist told me that "the net effect is the same ... this is a fixed cost and it could mean higher fees or fewer loans." It also will hit a much larger group of banks. The old tax would have targeted just the mega-institutions that played the biggest role in making the financial mess. The new stealth tax socks all banks with $10 billion or more in assets -- many of which avoided irresponsible lending practices and fancy investment instruments -- charging them $5.7 billion in higher premiums. (Because more banks pay, the huge banks get away with paying less.) Even though the policy will not go into full effect for ten years, costs could rise much sooner -- at a time when all banks are under greater pressure than ever to make more loans and get credit flowing again. And hedge funds seem to be spared any new tax at all.

So Scott Brown the populist crusader, the protector of the middle class, the most popular politician in Massachusetts, has pushed a policy that probably means lower taxes for Wall Street, higher premiums for Main Street banks, and less lending to small businesses.

Jump to comments
Presented by

Brian Goldsmith is a contributor to TheAtlantic.com. A former political producer for the CBS Evening News, he is now a student at Stanford Law School.

Get Today's Top Stories in Your Inbox (preview)

The Death of Film: After Hollywood Goes Digital, What Happens to Movies?

You'll never hear the whirring sound of a projector again.


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

The Death of Film

You'll never hear the whirring sound of a projector again.

Video

How to Hunt With Poison Darts

A Borneo hunter explains one of his tribe's oldest customs: the art of the blowpipe

Video

A Delightful, Pixar-Inspired Cartoon

An action figure and his reluctant sidekick trek across a kitchen in search of treasure.

Video

I Am an Undocumented Immigrant

"I look like a typical young American."

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Writers

Up
Down

More in Politics

Just In