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Warren: SEC can't fix tax loopholes used by big banks

Staff writer |
Wall Street banks and their top executives should face new tax penalties to keep them from engaging in risky practices, U.S. Senator Elizabeth Warren (D-Mass.) said.

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Ms. Warren called on the Republican-led Congress to close a tax loophole that she said encourages bank chief executive officers to seek quick gains.

Change the tax code to promote more long-term investment.
"We can close that loophole and stop pushing companies to reward short-term thinking. Congress should change the tax code so that executive compensation is aligned with the long-term health of these companies."

"We know what changes we need to make financial markets work better. Strengthen the rules to prevent cheating. Make the cops do their jobs. Cut the banks down to size. Change the tax code to promote more long-term investment," she said at the Hyman P. Minsky Conference on the State of the U.S. and World Economies.

Banks that aren't well-capitalized should pay more so that taxpayers aren't on the hook for the negative consequences of their risk-taking. She also called for creating a transactions tax to curtail high-frequency trading.

Ms. Warren faulted the Securities and Exchange Commission (SEC), which was authorized by Dodd-Frank to address executives, saying the agency "still can't seem to figure out how to write those rules."

"The SEC needs to get its act together - in all sorts of ways, and on all sorts of issues ranging from credit rating agencies to corporate political contributions - but we can't sit on our hands on this issue any longer."

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