David from Manhattan Beach asks…..What is your position on the recent ‘too big to fail’ tax on big banks (to recoup some of the tarp costs)?

The basic concept of too big to fail is the root of the problem.  One of the benefits of a free market system is the freedom to fail.  One must take a certain amount of risk in order to achieve a certain amount of reward.  So at a very base level I disagree with the premise that anyone is too big to fail.  The problem with the “too big to fail TARP recovery tax” is that it doesn’t solve the problem and harms the shareholders.  Most TARP recipients have already repaid (with a 5% dividend) the funds they took or were forced to take.  The money that has not been paid back is still with Fannie, Freddie, GM, Chrysler, and AIG.  It is not the banks at this point in time.  Understanding that corporations never pay tax anyway (the consumers of their products do), the shareholders (taxpayers) are harmed because the tax comes out in the way of increased fees to consumers and lower returns for shareholders.  What exacerbates the problem is that the law requires the government to return the TARP payments to reduce the deficit.  Instead, the Obama administration wants to loan/give the money back out again.  We must stop the cycle now!