Tax the TARP Subsidy Campaign
Enlace is working with the Rural Organizing Project, the Center for Intercultural Organizing, Jobs With Justice, and other groups on the Tax the TARP Subsidy Campaign. The campaign seeks to get the State of Oregon to tax the unjustifiable subsidy from the Troubled Asset Relief Program (TARP) funds received by Oregon subsidiaries of giant financial holding companies like JP Morgan Chase and Bank of America in the closing days of the Bush administration. This subsidy is estimated to be over $364 million.
As the economy continues to worsen, politically racist attacks on immigrants increase correspondingly. As more workers fear the loss of their jobs, health insurance and pensions, immigrants are unjustly blamed for these and other problems such as crowded schools and overcrowded hospital emergency rooms. The tax on the bailout subsidy of these mega-banks would go toward much needed human services in Oregon and shift the public debate from scapegoating immigrants and people of color to the source of these hard times: greedy international financial institutions.
Troubled Asset Relief Program (TARP)
In October 2008, the TARP provided over $350 billion in federal funding to the largest US bank-holding companies. These are the financial institutions that have crashed both the US and Mexican economies and initiated a worldwide recession. While the bailout was tax-free from the federal standpoint, there is nothing to prevent a state from taxing the companies incorporated in that state that are subsidiaries of TARP recipients. A Congressional study has found that much of the TARP money paid out was a subsidy, or gift, to those financial institutions. For example: J.P. Morgan Chase received $25 billion from the TARP, over $274 million of it in Oregon. Over $49 million of the TARP money JP Morgan Chase received in Oregon was a windfall subsidy. A 35% charge on the subsidy within J.P. Morgan Chase’s Oregon TARP funds would yield over $17 million.
Seven financial holding companies that have subsidiaries incorporated in Oregon received a total of over $105 billion from TARP. The amount received by these holding companies increased their Oregon assets by over $1.6 billion. This taxpayer money was designed to cover the bad investments the banks made with other people’s money and enable lending institutions to provide loans with terms that would prevent home foreclosures and layoffs. But the financial heavyweights spent much of the bailout money on acquisitions of competitors and lavish executive bonuses. By initiating a financial avalanche, these institutions not only put their customers’ assets at risk, but also raised social costs for the state of Oregon.
A windfall tax on the financial industry TARP subsidy in Oregon would yield enough to cover the shortfall in increased emergency medical services in our state caused by the irresponsible conduct of the TARP financial holding companies.
When you win the lottery jackpot in Oregon, you pay a 35% tax on your windfall – Bank of America, JP Morgan Chase, Wells Fargo and the others should pay the same for theirs.