US Financial Crisis: Bailout, Whose Burden is that Anyway?
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Code : ECC0016
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Region : US |
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Tax Burden on Americans In US, from 1790 tillWorldWar I (1914), tariffs were the largest source of federal revenue.After that, income tax replaced tariff and became the largest source of government revenue. The first income tax was recommended in the US during the Anglo-AmericanWar of 1812.But it was only during the CivilWar in 1861 that for the very first timeAmerican income tax law was enacted to finance thewar. This lawwas the predecessor of the current US income tax system, as itwas based on the principle of progressive taxation... Bailing out Wall Street – Burden on the MainstreetThough the main intention behind the bailout is to stop the panic in the financial sector, there is lot of controversy surrounding the issue of whether the taxpayers should bailout the financers of the Wall Street or not. Some say it is a temporary relief as once the crisis is over the financial industrywill start behaving in the same way.As history of S&L crisis suggests, thatmight result in onemore crisis. So howlong can a taxpayer pay for the folly of financers?As it is rightly said, "once banks know that they can play the high-risk, high-return game, pocket the profits, and let taxpayers face the risks, bailouts provide a temporary relief but set the ground for the next crisis". Some are saying that the bailout is sheer waste of taxpayers'money, as it won't work... |
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Protecting the Interests of Tax Payers Economic pundits proclaim that US taxpayers' protection should be adequately addressed in this entire bailout.As Senator Ken Salazar put in, "American families are rightly concerned about the impact a worsening financial crisis would have on their savings, their home values, and on their economic security. They are also rightly concerned about the risks that theAdministration's proposal carries for taxpayers. Taxpayers want – and deserve – the strongest protections and oversight possible." Barney Frank, chairman of the Housing Financial Service Committee, says there are adequate measures to protect the taxpayers. The measures include, "(i) Bailout installments of $250 billion each (ii)An oversight committee that will review Treasury's purchase and sale ofmortgages...
