BALTERS: Taxing big finance institutions would benefit U.S.

Republicans and Democrats are eventually both going to have to face the yawning deficit haunting this nation. Part of facing this monster is coming to the sober realization that it won't be sufficiently deflated with a combination of spending cuts and tax increases. Judging from the necessary but expensive health care bill, the former half of that cocktail doesn't have much of a chance of being implemented anytime soon.

But due to a Democratic supermajority and strong anti-Wall Street sentiment among Republicans and the general public, the latter half of the needed combination of policies (tax increases) appears to be easier to implement. Taxation is a classic divisive issue between Republicans and Democrats. Fierce debates led to forced compromises and no one has ever agreed unanimously on which bracket or group deserves a new or increased tax.

Sometimes it has seemed obvious that the best place to tax was where the largest stash of money was, i.e. the upper-echelon super rich. In their defense, the fiscally conservative argued that heavily taxing this group unfairly targets the successful, and that they cover half the tax burden in the country already. This, in general, illustrates the Republicans' efforts to shelter the major income generators and holders from taxation, along with the argument that the economy is healthier and more money is available when the rich have fewer taxes to pay.

The Obama administration, however, seems to have found a tax group, with heavy funds behind it, that the Republicans, or anybody else for that matter, wouldn't want to defend. Again this is a positive, because the nation needs cash, and it's someone who owes us: the financial institutions that both caused the economic mess and gladly accepted billions to try to clean it up. Proposed on Friday, it (thankfully) hasn't come under much fire.

Normally, a contingent of conservative lawmakers might come to the defense of the kings of Wall Street. Over the last year, however, a grass roots movement started by Fox News has spoon fed the Republican Party its most traditionally conservative fiscal principles as mythic, universal laws. These Tea Partiers viewed the bailouts as socialist treason and saw to it that the rest of the party did, too. To them, the system should have been allowed to let the financial giants like Goldman Sachs fail.

To capitalize on their sentiment and gain anti-Obama momentum, Republicans in office have had to admit that in Bush's closing days in office they made a mistake in helping these companies. With Tea Partiers organizing decent campaigns against incumbent Republican office holders in certain parts of the country in recent months, those in Washington looking to appease the (sadly) only thing going for their party right now will not oppose this tax.

Of course this tax is absolutely crucial for the Democrats. They are the ones who actually carried out most of the injection of funds into the floundering financial institutions. It was also Wall Street who had a great deal to do with getting Obama elected president. Their close association doesn't look good to the rest of the party, nor does it play well with moderates.

In an election year that appears to threaten a sizable group of both Republican and Democrat lawmakers, this effort by Obama unhindered by Republicans is obviously a political move. Wall Street is a popular public enemy. But we should condone the political ploy on the grounds that it will do some good for this country. While it probably won't go to directly paying off the deficit (our government would never be that practical), it will at least stall its hemorrhaging.

Lobbyists for the tax's potential targets — places like JPMorgan and Citigroup — have warned the tax would only be passed on to consumers. However, it would not cover actual savings deposits or even the company's stock holdings. The tax hits hardest those who deal less with the average customer and only includes the largest firms. That means the vast swell of small to mid-sized banks across the country will remain untouched. If, somehow, the tax does hurt customers, there would most likely be an influx of customers and profit for those smaller banks.

By no stretch of the imagination is this tax unfair. It will take $1.2 million for every billion in assets from places with hundreds of billions. On this point, Obama silenced any dissenters: "We're already hearing a hue and cry from Wall Street suggesting that this proposed fee is not only unwelcome but unfair, that by some twisted logic it is more appropriate for the American people to bear the cost of the bailout rather than the industry that benefited from it."