Mayor Bloomberg said yesterday that President Obama’s plan to slap a tax on banks is aimed squarely at the city’s lifeblood and could turn Manhattan into a crumbling wreck like Detroit.
Bloomberg warned that the plan could bring about the collapse of the city’s financial sector and starve New York of revenue it needs to provide basic services.
“The way we pay our cops, firefighters and everybody else in the city is from tax revenues,” Bloomberg said.
“And if you want to see what happens to a city when their major industry fails, just take a look at Detroit,” which has been reeling from the collapse of the auto industry.
Bloomberg, a frequent Obama ally, said New York, in a similar way, is “dependent on the major industry here. When it does well, that’s how we build up money to carry us through the bad times.
“I’m very concerned that we don’t drive business overseas. London became a financial center when we increased regulation here,” he said, adding, “I certainly hope our legislators in Washington will fight to protect our industry here.”
But the early indications weren’t clear.
Sen. Charles Schumer, an Obama supporter who typically champions Wall Street, is for the bank-tax proposal.
“While we await the details of the president’s proposal, the original rescue legislation clearly required that financial institutions that benefited from [the bailout] would contribute additional funds until taxpayers were fully repaid. The point of that provision was to put taxpayers first, and I agree with that,” Schumer (D-NY) said.
Kirsten Gillibrand, Schumer’s New York Democratic colleague, said, “While the administration’s approach is far better than some proposals, such as taxing financial transactions, our focus should be on making sure that banks are lending to small businesses and spurring immediate job creation.”
She added she was concerned the tax “could disproportionately affect New York City’s economic recovery.”
At the White House yesterday, Obama revealed his new plan to slap billions in new taxes on the country’s biggest banks.
“We want our money back, and we’re going to get it,” he fumed in promoting the tax, predicted to raise $117 billion over 12 years.
The president said the tax would recoup the funds estimated to be lost through the $700 billion Wall Street bailout — but also suggested it was a way to punish banks preparing to hand out billions in bonuses despite taking taxpayer money.
“My determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at some of the very firms who owe their continued existence to the American people,” Obama said.