U.S. Chamber CEO Calls Obama's Plan to Tax Bank Transactions ‘Bad Idea’

January 13, 2010 - 7:42 AM
Tom Donohue, CEO of the U.S. Chamber of Commerce, said the Obama administration's plan to tax bank transactions to recoup some of the $364 billion in TARP bailout funds is misguided.
Tom Donohue, U.S. Chamber of Commerce

Tom Donohue, CEO of the U.S. Chamber of Commerce, gave his State of American Business address Tuesday in Washington, D.C. (CNSNews.com/Penny Starr)

(CNSNews.com) – Tom Donohue, CEO of the U.S. Chamber of Commerce, said the Obama administration’s plan to tax bank transactions to recoup some of the $364 billion in TARP funds used to bail out the U.S. financial sector is misguided.
 
“It’s a bad idea,” Donohue told CNSNews.com at a news conference following his State of American Business address at the Chamber’s headquarters in Washington, D.C., on Tuesday.
 
“The interesting thing about the suggestion of some form of tax or another on bank transactions, the immediate thing they say is, ‘don’t pass it on to consumers,’” Donohue said. “If you know anything at all about how business works – every kind of business – it would be helpful.
 
“If you don’t pass it on to the consumer, then you’re going to have smaller profits,” Donohue said. “If you have smaller profits, then your stock is going to go down. If your stock goes down, then everybody that holds your stock may need to sell it, or they are going to have less money in their 401K or in their pension plan or in their investment deals.
 
“There are so many unintended circumstances when you try and gerrymander the economic system to try and meet your political objectives,” Donohue said, adding that it was a good thing that such a tax would require congressional approval.
 
Donohue’s remarks at the press conference were in keeping with the tone of his address, which set forth five ways to create jobs and improve the economy – all diametrically opposed to the Obama administration’s strategies for dealing with the sagging economy and more than 10 percent unemployment.
 
Donohue said the word that most aptly describes the state of American business is “uncertainty.”
 
“Think for a moment about the nation’s job creator -- the men and women who run our small and large businesses -- as well as those who lead our universities, our health care facilities and the many other institutions that employ our workforce,” Donohue said. “If you were in their shoes today, would you jump quickly into new investments and hiring? Or would you wait for some clarity, and some common sense, to take hold first?”
 
He said that what appears to be taking shape on Capitol Hill is ending existing tax cuts and adding hundreds of billions of dollars in new taxes, expanding a national debt that will increase to at least $9 trillion over the next decade, a rise in isolationism in the U.S. and abroad, labor unions lobbying for workplace control, and a renewed fear of terror attacks.
 
“These are the uncertainties that job creators are wrestling with -- uncertainties that call into question how quick or strong our economic recovery will be. And no one is paying a higher price than the American worker,” Donohue said in his address.
 
Donohue laid out five strategies to tackle what he called the greatest challenge facing the nation.
 
“Our nation faces many big challenges, but no priority is more important than putting Americans back to work,” Donohue said. “And so the Chamber is calling upon leaders in government, business, labor, and across society to unite around the ambitious goal of creating at least 20 million new jobs over the next 10 years.
 
“With 20 million jobs, we can re-employ the unemployed and meet the needs of our young people and a growing population,” Donohue said.
 
The five strategies Donohue spelled out in his speech include:
 
-- Eliminate barriers that prevent expansion of U.S. exports around the world.
 
-- Rebuild the nation’s infrastructure using the private sector.
 
-- Make nuclear energy the cornerstone of investing in clean energy technology.
 
-- Expand credit to businesses, especially small businesses, by improving capital markets.
 
-- Address economic uncertainties, including taxes and health, environmental, labor, legal and fiscal policies.
 
Donohue concluded his speech by clarifying the role the Chamber will play in the upcoming 2010 mid-term elections.
 
“We don’t get involved in presidential politics – period,” Donohue said. “But as Americans choose a new House and new senators this fall, the Chamber will highlight lawmakers and candidates who support a pro-jobs agenda, and hold accountable those who don’t.”
 
He also said that those who discount the role of free enterprise in making America the great nation it is, despite today’s challenges, are mistaken.
 
“Of all the innovations America has bestowed upon the world, free enterprise is the greatest innovation of them all,” Donohue said. “It renews and reinvents itself every day. It is never old and tired. It is always young and vibrant.
 
“That’s because its strength and goodness rest on the enduring principles of individual liberty, personal responsibility, and the basic human right of every person to be and do his or her best,” Donohue said. “And when that happens, society is well served.”