90% Tax On AIG Bonuses: Go Or No Go?

Is there any end to the theft of hard-earned dollars from the American public? The lead story in the WSJ today is suggesting that the storm is passing, with regard to the bonuses that were paid to the large financials such as AIG (AIG):

WSJ:

The bonuses sparked an outpouring last week in the House, which voted overwhelmingly to impose a 90% tax on many bonuses, not just at AIG but at all institutions receiving significant financial-bailout support. But the legislation now appears certain not to come up in the Senate until after a two-week recess that begins April 3. It could be put off altogether if the administration demonstrates a commitment to reining in such payments in the future. The diminishing ardor follows comments from President Barack Obama pouring cold water on the House bill. Senate Republican leaders have also urged caution, and a number of AIG executives recently returned the controversial payments. Other moves by the administration - including a revamp of financial-markets oversight, which will include some executive-compensation rules - could provide cover to drop the matter.

It’s part of the problem with the fabric of America. Everything is 20-min soundbites with the national press. This story is important for 12 hours, then it’s forgotten and we’re on to the next crisis. American should be outraged that these bonuses are being paid. We can blame those in power with dropping the ball on this one.

When the TARP funds were originally put forth by the Congress, there were stipulations in the Agreement that set limits on compensation. Why are they not going to be enforced. It seems that the article above is suggesting that the Senate is going to put off discussion of the House bill for a while. This is wrong. The money will be spent and moved offshore by the time they get back from their recess.

Subscribe by RSS Subscribe by Email

Comment by Michael Budnicki

2009-03-25 15:16:52

AIG employees were let down big time and if this administration thinks it is going to help this Country by crucifying these people with 90% taxes it had better think again. We have already lost our manufacturing base which not long ago was the backbone of this Country and now have become a “service” economy. I am not a wealthy person nor am I an executive, I am however grateful for generosity the wealthy has shown to the people in this Country. I cannot for the life of me think why any business who gives people jobs that gives them food and shelter as well as educations for their children would ever stay in any Country who threatens a 90% tax. Frankly I am embarrassed and ashamed at the lack of any integrity in this administration at all. Furthermore I believe the late John Gotti had more respect for a business contract. Every one of those workers earned those contracts and for any American to believe otherwise is foolish. Once a man’s word was worth something, some mens words are still worth something, for others there are (were) contracts. No, this administration isn’t helping anyone, not the rich, not the poor and though it may cost many money that could have gone to helping Americans, for the rest of us it is going to cost the chances for opportunity to make a better life for our families.

Reply to this comment

 

Comment by Kiwi

2009-03-27 07:36:50

A civil contract or agreement is supposed to deliver similar benefit to both parties, when it does not it is described as onerous or mistaken and Courts are inclined to nullify them. The point is that a commercial contract is never supposed to become a punishment, it is only supposed to be of benefit to both parties.
Given that AIG has lost billions thanks to some of their high flying employees, those twerps should fairly expect a similar outcome.
Tobacco is taxed at 80% in many countries, alcohol often over 50%, each according to the harm they do. It is only the bonus being taxed, not the whole income…
If you get a share of the profit you must expect a share of the pain.
Given the massive harm that has been done by them, I feel they deserve what Madoff, Bin Laden or even what Saddam got. No sympathy at all.

Reply to this comment