Thursday, March 24, 2016

Chicago should tax ATM fees (& check cashing fees) to fund schools

Chicago Public Schools need money to operate & pay pensions.

Proposal: tax ATM fees & similar transactions where banks (financial service companies) are charging fees for people to get their money.

For ATM fees, it should be set-up that the money is coming from the bank's revenue stream, not a cost passed on to the consumer. I propose taxing ATM fees at one level if they are not increased and at a higher level if the banks (ATM operators increase fees).

ATM fee tax

 ATM operators will pay a 50% tax on ATM fees over $1.

ATM operators will report the fees charges on ATMs as of 30 November, 2015.

If ATM operators increase ATM fees by more than $0.50 over the 30 November, 2015 amount, the tax rate will change to 75% of the ATM fee over $0.25.

New ATMs will get taxed at 50% of the ATM fee over $1, if they fees at or below the prevailing ATM fee for the community area. If the fee is above the prevailing fee for the community area, the tax will be 75% of the fee over $0.25.

Check cashing tax on fees charged by banks

 Banks typically charge $5 to cash a check drawn on the bank, if the recipient does not have an account with that bank.

These fees are extortion. If the person to whom the check is made out has a bank account and time to wait for the money, there's no fee for going through the bank-to-bank system.

These check cashing fees should be taxed at 95% for up to $5. Any fees over $5 should taxed at a higher rate.

Other check cashing fees

 The ordinance should consider whether other check cashing fees should be taxed, especially fees that are excessive.

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