TAG Taxes Taxpayers

FDIC insurance covers up to $250,000 per bank account. During the ‘08 financial crisis, Congress passed the Transaction Account Guarantee (TAG), providing unlimited insurance for non-interest bearing accounts. While TAG might have made sense then, it doesn’t now. TAG not only rewards badly run banks, it creates future instability. As interest rates rise, cash will flow to interest bearing accounts, destabilizing banks that rely on non-interest bearing TAG money.