GMAC Financial Services is likely to be taxed
By Andrew C., 27 Aug, 2010. 0 Comments
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GMAC Financial Services will most likely be asked to pay a fee under a new Obama administration proposal to impose a levy on US banks to recoup bailout money. General Motors Co. and Chrysler Group are exempted but GMAC will likely be taxed, according to an e-mail from a Treasury Department spokeswoman. However, the administration has yet to determine the payment that the banks must make or when the final decision on which institutions to include in its proposal will be made.
The new tax, if approved by Congress, would demand that banks, which include J.P. Morgan Chase & Co., Citigroup Inc. and Bank of America Corp., have to pay a total of $90 billion over 10 years.
This revenue covers a majority of the estimated $117 billion loss to Treasury's Troubled Asset Relief Program. The TARP was initiated in 2008 by the Bush administration to bail out financial institutions. GMAC's financial stability is vital to the car industry since it provides floorplan financing to GM and Chrysler dealerships and also finances consumer auto loans. GMAC got a $16.3 billion investment from the federal government, which now owns 56% of the lender. [via autonews]
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