90 Percent Tax on AIG Bonuses: Has America GONE MAD!?! See Our Poll!
March 22, 2009 11 Comments
ATLANTA— Outrageous! The House overwhelmingly approved a 90 percent tax on bonuses at American International Group Inc. and other companies receiving bailout funds last Friday. The House bill would affect employees earning more than $250,000 who received bonuses from companies that received more than $5 billion in aid from the Troubled Asset Relief Program (from Bloomberg.com). I am floored by the massive taxes that have been passed by the House of Representatives to resolve the AIG Bonus scandal.
I agree with the basic argument that the AIG bonuses are troubling in that they are funded with tax-payer dollars and give away tens of millions to individuals who were involved in creating the mess that led to AIG’s collapse. But the House of Representatives’ response is to me even more outrageous. This is the type of reactionary populism we are accustomed to viewing in Venezuela and other, left-leaning Latin American countries. Not the good old U.S. of A.
I think these AIG bonuses need to be addressed, but confiscating them through taxes is beyond ridiculous. A more reasonable approach would have been for the government first to have read the employment contracts back in September of 2008 when they bought a chunk of the company and then to have worked with the employees to whom they related to renegotiate the contracts by delaying or reducing the amounts owed.
At any rate, respond to our poll above and let us know your thoughts. Are these taxes outrageous? Or is this just what the doctor ordered? If you disagree with me or my perspective, definitely post below because I would love to hear your reasoning.
I, for one, hope Barack Obama does not sign this into law. If he does (as I fear he will), I hope these taxes do not hold up in court. From what I read, the legislation violates the constitutional ban on bills of attainder, which restricts lawmakers’ ability to punish individual Americans.
If we continue to trump our constitution to satiate populist fury, then we are headed down a very short road to ruin in this country.
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Stephen VanNuys
TennesseePaul
The Freedom Thinker
Only one question–If this goes through ‘Who’s next?”
Towp- I hear you. I read an article this weekend suggesting this may be the first in a series of steps by left-leaning lawmakers to re-hike the top tax rates back up to where they were before Reagan, and even before JFK. Back in the day, the top wage brackets were taxed in the 70 – 90 percent range. Needless to say, those rates coincided with periods of mediocre economic growth.
But with Obama’s budget proposal, Dems are coming after all of us. They could take every dime earned each year by the top 5% of wage earners in this country and it wouldn’t begin to cover the massive deficits he’s promising us.
While I’m on my stump here, I want to just ask, with the parade of incompetence we have seen from our government from Katrina, to TARP, to the AIG bonus scandal, why would any American in their right mind want MORE and not LESS government involvement in healthcare, energy, etc.
Obama is the wrong man for the times. But hopefully all the teeny boppers who voted him in office will keep their eyes open and witness his failings so that they learn strong lessons about the short-comings of socialism.
Ok – off my stump. Thanks for dropping by!
Yippee!!!
I think this is a horrible idea. And like towp asks, “Who’s next?” I think this is the scary question. If this can be passed and is held up by the Supreme Court then what? What if they want to lower those numbers? What if they want to go back further then a year? What if they want to go back after state money? When you think about it a lot of people get some form of federal money. All healthcare providers get Medicare and Medicaid which are already beginning to dictate what doctors get bonuses and what doctors don’t. But what if you are a contractor that get’s paid to work on a road or school building or something. What if you are an accounting firm that takes money from a federally funded institution.
As my business law professor taught laws can have many unintentional consequences like RICO putting grandma’s in jail on federal charges or taking a child out of a home with love because the parents have low IQ’s or locking up a policeman for defending himself.
This law I think is pretty dangerous. I hope the supreme court strikes it down pretty hard.
This is great news. Once this passes we can lobby to pass 99% tax hikes on all Ralph Nader voters.
It is ridiculous. I have never felt a relief in tax burden when the government increases taxes some one else. My tax burden remains the same. Only those consumed by coventeousness could feel some glee and relief in watching their wealthy neighbor being squeezed more.
Statements by Dodgers owner Frank McCourt were just one reason the union filed a grievance about teams requiring players to make contributions to club charities, according to major-league sources.
The actions of the Rangers, Pirates and other clubs prompted the union to begin preparing its grievance in January, sources say. Free-agent outfielder Manny Ramirez did not agree until March 4 to contribute $1 million to the Dodgers Dream Foundation as part of his new two-year, $45 million contract.
McCourt said after the signing that “every future Dodger will be asked to fill in a blank line” for a charitable contribution. The grievance cites 21 other teams for similar actions, sources say.
“This was not something that was motivated by the McCourt announcement,” one union source says. “This was something that was in the works for a while.”
The Pirates required donations to Pirates Charities in their recent multi-year signings through payroll deductions, sources say, while the Rangers told arbitration-eligible players that any contracts settled prior to a hearing would require a contribution to the Rangers Foundation. The Rangers later made an exception for one player, according to one source.
“There is a huge difference between a player wanting to make a charitable contribution and a player being told that he must make a donation to a club’s charity,” one agent says. “Every player I know will gladly donate to charities of their choice.”
Responds Rob Manfred, MLB’s executive vice president of labor relations: “My quibble with that is ‘forced.’ These clauses are individually negotiated provisions. They agreed to them. It’s not like clubs are putting guns to players’ heads and saying, ‘Do this.’”
Manfred says that the union asks for “make-whole,” monetary relief in the grievance. He disputes the notion that the clauses are of no benefit to players, saying that the “benefit is the perception of that athlete in the community.”
Manfred also says that the clauses often are a way of bridging the gap at the end of a negotiation, with teams agreeing to pay players more in exchange for a charitable donation.
If a private citizen mentions this same perspective when it comes to Government Taxation for “charities” vs contributing to a charity of their own choice… liberals always call said person “stingy” or accuse them of “hoarding” money.
Stephen only problem with all those teeny boppers–they’ll nevers see or understand the failings of the current admiistration–American Idol is on and there to busy voting for their favorite rock star–just like they did in November !
AIG executives are leaving and going to take their business to other firms. Why is the government wrecking the value of the Company is have invested almost $200B in? This is another example of the conflict of interest in the government participating in private markets. They should not be running anything except our regulations, much less financial institutions.
Agreed, Marshall. Thanks for dropping by. I will not be surprised to see more and more individuals leave these institutions that are partially owned by the government. The government is so hapzhard and the rules keep changing. People are going to get fed up and quit.
I think Obama finally realized this week that you can’t simultaneously demonize Wall Street and threaten them with confiscatory taxes and then ask them to take more bailout money and invite them to participate in this public/private bad asset plan.
I read an article just yesterday about Obama’s meeeting with the bank execs in which the author mentioned the Obama team has been caught off guard by the fact that the banks are working desparately to pay the TARP money back and are resistant to taking any more. The banks don’t want to participate in these programs anymore. To be honest, many didn’t want to participate to begin with. Paulson basically forced banks like Wells Fargo to take the money, when they didn’t even need it.
What a sham.
What angers me in all this is that the president of our country shouldn’t have also be a bank executive, auto executive, health care insurance executive, and everything else that this mess and his agenda are allowing him to be. The government is way too heavily engrained in the economy. It will ultimately stunt the recovery, I’m convinced.
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