Tag Archives: fee

Where do America’s biggest banks make their money?

Most people know the traditional banking model, if only from George Bailey in It’s A Wonderful Life.

In simplified form: A bank takes deposits from savers, and pays them a low interest rate. Then it lends that money out to borrowers at a higher interest rate. The bank’s profits come from the difference between the rates.

 

Charming…but far from the truth for the modern bank. An article from NPR’s Planet Money looked into JPMorgan Chase, the largest bank in America, and found they do much more than that.

The two most important ‘extra’ activities are charging fees and the outright investing of their own money. Here is how it breaks down:

  • $48 billion – interest from loans
  • $35 billion – fees
  • $11.5 billion – trading

A little less than half of the bank’s revenue comes from non-traditional banking activities (fees, trading). Not so bad, especially with trading accounting for so little. Remember, one of the root causes of the financial crisis was all the big banks exploding their trading. When the market collapsed so did they, but were “too big to fail” and we had to bail them out.

Suffice it to say that banking with deposits and loans is very hard (George Bailey nearly went under), add in too much trading and banks become very unstable.

 

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Learn more about the Affordable Care Act – the individual mandate: penalty and subsidies

If you can afford insurance but do not get it, you will be charged a fee. This is the “mandate” that people are talking about. Basically, it’s a trade-off for the “pre-existing conditions” bit, saying that since insurers now have to cover you regardless of what you have, you can’t just wait to buy insurance until you get sick. Otherwise no one would buy insurance until they needed it. You can opt not to get insurance, but you’ll have to pay the fee instead, unless of course you’re not buying insurance because you just can’t afford it.

*Note: On 6/28/12, the Supreme Court ruled that this is Constitutional.

 

ViaReddit – What exactly is Obamacare?

 

 

More details from Kaiser Health News:

Q: I don’t have health insurance. Will I have to get it, and what happens if I don’t?

A: Under the legislation, most Americans will have to have insurance by 2014 or pay a penalty. The penalty would start at $95, or up to 1 percent of income, whichever is greater, and rise to $695, or 2.5 percent of income, by 2016. This is the individual limit; families have a limit of $2,085 or 2.5 percent of household income, whichever is greater. Some people can be exempted from the insurance requirement, called an individual mandate, because of financial hardship or religious beliefs or if they are American Indians, for example.

Q: I want health insurance, but I can’t afford it. What do I do?

A: Depending on your income, you might be eligible for Medicaid, the state-federal program for the poor and disabled, which will be expanded sharply beginning in 2014. Low-income adults, including those without children, will be eligible, as long as their incomes didn’t exceed 133 percent of the federal poverty level, or $14,404 for individuals and $29,326 for a family of four, according to current poverty guidelines.

Q: What if I make too much for Medicaid but still can’t afford coverage?

A: You might be eligible for government subsidies to help you pay for private insurance that would be sold in the new state-based insurance marketplaces, called exchanges, slated to begin operation in 2014.

Premium subsidies will be available for individuals and families with incomes between 133 percent and 400 percent of the poverty level, or $14,404 to $43,320 for individuals and $29,326 to $88,200 for a family of four.

The subsidies will be on a sliding scale. For example, a family of four earning 150 percent of the poverty level, or $33,075 a year, will have to pay 4 percent of its income, or $1,323, on premiums. A family with income of 400 percent of the poverty level will have to pay 9.5 percent, or $8,379.

In addition, if your income is below 400 percent of the poverty level, your out-of-pocket health expenses will be limited.

 

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Facts and statistics on the coming plastic bag ban in California

Plastic bags contribute to the pollution of California’s ocean and beaches.

  • Californians use approximately 16 billion plastic bags per year – more than 400 annually per person.
  • Less than 5 percent of plastic bags are recycled. Instead, they end up sitting in landfills, littering streets, clogging streams, fouling beaches, or floating out to sea.
  • Plastic trash threatens ocean ecosystems.
  • The city of San Francisco estimated that the taxpayer cost to subsidize the recycling, collection, and disposal of plastic and paper bags amounts to as much as 17 cents per bag. Applied to California as a whole, that adds up to more than $1 billion per year.

 

More than 80 national and local governments around the world have taken action to protect the ocean by reducing the use of plastic bags.

  • At least 20 nations and 47 local governments have passed bans on distributing specific kinds of throw-away plastic bags, including the nations of Italy, Kenya, Mongolia, Macedonia, and Bangladesh; the states of Maharashtra, India and Buenos Aires, Argentina; and the cities of Karachi, Pakistan and Telluride, Colorado.
  • Approximately 26 nations and local communities have established fee programs to reduce plastic bag use and/or increase the use of reusable alternatives, including Botswana, China, Hong Kong, Wales, Ireland, Israel, Canada’s Northwest Territories, Toronto, Mexico City, and Washington, D.C.

 

Bans and meaningful fee programs effectively reduce plastic bag pollution.

  • Bans and fee programs quickly reduce plastic bag distribution.
    • Fee – In 2002, Ireland established a 28 U.S. cents per bag fee, and saw plastic bag use drop by 90 percent within the first year.
    • Fee – Washington, D.C., implemented a much smaller 5 cent tax on plastic bags, the number of bags distributed by food retailers fell from 22.5 million per month to 3.3 million per month.
    • Ban – San Francisco, the year after banning plastic bags at pharmacies and supermarkets in 2007, businesses distributed 127 million fewer plastic bags, and cut overall bag waste reaching the city landfill by up to 10 percent.

 

Fourteen city and county governments in California have taken successful action to reduce plastic bag pollution.

  • Fourteen California cities and counties have bans on plastic bags in effect, including Long Beach, Santa Monica, San Jose, San Francisco, and Pasadena.
  • Five of these communities, including Marin County and San Jose, have also authorized mandatory charges on paper bags to encourage citizens to use reusable bags.

 

Much more progress can be made to reduce plastic pollution in the ocean and transform our throw-away culture.

  • Education and recycling cannot keep pace with the generation of plastic bag pollution. Despite a 2006 law requiring retailers to place bag recycling bins in front of their stores, less than 5 percent of bags are recycled.
  • To make a real impact, all California cities and counties should restrict the use of plastic bags, and advocate for similar action at the state level.

 

From the Frontier Group.