Monday May 28, 2012

Republicans put brakes on to tax AIG bonuses

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  • 0

    adaydream

    Republicans are just complaining. No big deal.

    It is an embarrassment for the administration, this fiasco, but the country will survive. No body has waterboarded anybody, yet. < :-)

  • 0

    smithinjapan

    Well well well... guess the Republicans agree with the major bonuses after all.

    That, or perhaps they are just doing anything in their little remaining power to filibuster and delay passage of Dem's legislation strictly for the sake of doing so.

  • 0

    skipthesong

    I caught the Jay Leno clip and they mentioned this. Jay's concern was a bit correct in my eyes. ONe, the tax is more for political reasons. To give someone something only to take it back is not the right thing to do.
    The best thing would have (past tense I know) been to not give out the bonuses in the first place. If the government is going to throw a tax on you because of what is widely a political issue, that's not right. You are well aware the AIG is not the only company receiving money and has given out bonuses right?

  • 0

    smithinjapan

    skip: "To give someone something only to take it back is not the right thing to do. The best thing would have (past tense I know) been to not give out the bonuses in the first place."

    That's a given, so to speak, but the fact of the matter is the bonuses are what were allowed to be given prematurely, and taking them back via tax is the right thing to do -- not just for political purposes, but for practical purposes (since money is tight).

  • 0

    SuperLib

    So smith you support taxing the bonuses?

  • 0

    skipthesong

    might have to wait until after the recess" a recess. The nerve of these people. How many recesses has it been? What, they can't work over time or on weekends?

  • 0

    smithinjapan

    SuperLib: Yes I do, but only for those companies receiving bailout money from the gov't and for those that make over $250,000/year.

  • 0

    Molenir

    Ah, so if you make 250,001 dollars, then you're screwed! Good to know.

  • 0

    skipthesong

    I we are going to do this, I want all elected officials to give back their bonuses as well, their raises, reimbursement for many of their lavish benefits.... the list can go on and on.

    Again, AIG is not the only company that gave out bonuses. If it were you who recieved the bonus would you feel its only right to tax the hell out of it?

  • 0

    Sarge

    Nancy Pelosi: "We want our money back now for the taxpayers"

    She doesn't get it. It was never her money to begin with. It was the taxpayers' money that she and her fellow politicians squandered.
    And she's only talking about a measly $165 million - what about the $787 billon?

    Jay Leno: "Republican Sen. Charles Grassley said that AIG executives should follow the Japanese model by publicly apologizing and then resigning or killing themselves. I have a better idea: Why not have them resign and kill themselves on Pay-Per-View? That would raise enough money to pay off everyone they've screwed."

  • 0

    skipthesong

    for those that make over $250,000/year." well, that is a whole lot of politicians

  • 0

    Sarge

    "for those that make over $250,000/year"

    That's a whole lotta small businesses too.

  • 0

    skipthesong

    i hope u mean 250k single people

  • 0

    Sarge

    I mean people who own small businesses. And President Obama has said he wants to raise taxes on those making over just $200,000.

  • 0

    likeitis

    Skip: To give someone something only to take it back is not the right thing to do.

    Is a bailout a gift or a loan? It seems to me that the money was given with nothing clearly sorted at all, and that cuts both ways. It means we are making it up as we go along. I am good with whatever so long as it contains the spririt of fairness and justice. Taking the money and running is not remotely like that, and that is what the companies are doing. The hand of the government has been forced. This is much closer to fairness.

  • 0

    sailwind

    “I don’t believe that Congress should rush to pass yet another piece of hastily crafted legislation in this very toxic atmosphere, at least without understanding the facts and the potential unintended consequences,” Kyl said on the Senate floor. “Frankly, I think that’s how we got into the current mess.”

    Exactly.

    The Tax code drives people's behavior for good or bad. It's the most powerful tool Government has to enforce its policies on law abiding citizens.

    Prime example of not thinking about the unintended consequences of this legislation.

    Let's say that 90% tax rate on the bonuses the House wants passes and becomes law.

    I own a firm that recieved bail-out money. I made a promise to one of my executives if he performed and made whatever benchmarks I had set, that he would recieve a million dollar bonus. I made the promise prior to this tax rate, but I still intend to keep it and reward him for his hard work.

    Guess what, instead of paying him a million dollar bonus, I up it to 10 million, 10 million big ones. He pays 90% tax and he gets his million dollar bonus that I promised him. But of course the extra 9 million is money that I could have used to keep the firm solvent as I restructured it instead of just giving it back to Uncle Sam in taxes again. But what the hey, unintended consequences again.

    Government is just going to make the problem worse with this legislation as it stands now. Senator Kyl is right, Congress needs to calm down and really think this through before it passes anything that has the potential to make the situation even worse than it already is.

    See my above example as just one way some firms might react to this.

  • 0

    skipthesong

    Is a bailout a gift or a loan? It seems to me that the money was given with nothing clearly sorted at all, and that cuts both ways. It means we are making it up as we go along. I am good with whatever so long as it contains the spririt of fairness and justice." thats kind of my point. Since nothing was set, and Dodd has basically admitted to not worrying about it at the time, you are right, it does cut both ways and yes, it does seem that they are making it up as they go along. Kyle may be right, but he too is making it up as it goes along.

  • 0

    likeitis

    Skip: Kyle may be right, but he too is making it up as it goes along.

    Fair enough I think. No one was forced to take the money. They could have filed for bankruptcy, just like so many companies have in the past. If they did not want to hear about the money later on down the road, they should have gotten that in writing.

  • 0

    smithinjapan

    'or those that make over $250,000/year." well, that is a whole lot of politicians"

    Skip: Are the politicians also receiving bailout money from the government? That is what this is about with AIG--they are using bailout money to pay bonuses. I agree that those who make over 250K/year -- the 5% super-rich -- should pay more taxes in general, but we're talking here about taxing the bonuses of companies who received bailout money.

    While those who receive a salary of more than 250k/year may see higher taxes, I don't believe people are talking about taxing their bonuses 90% unless they received bailout money. If a private company is paying out bonuses from their own coffers, that's fine.

    I do agree, though, that the government officials should be giving back any bonuses they received.

  • 0

    smithinjapan

    "I own a firm that recieved bail-out money. I made a promise to one of my executives if he performed and made whatever benchmarks I had set, that he would recieve a million dollar bonus. I made the promise prior to this tax rate, but I still intend to keep it and reward him for his hard work."

    I absolutely love how the same people that were crying about these bonuses and blaming everything under the sun on Obama and the Democrats are now trying to support Republicans on blocking legislation that would get the money back from bonuses of companies that took bailout money.

    I guess so long as it's stamped 'Republican' they don't care if they're giving away all their money, and they'll STILL try to find a way of blaming it on Obama later.

  • 0

    Taka313

    I say give them the bonuses in front of the entire company and any AIG customers who want to show up and have their say. Most people, if shamed sufficiently, will do the right thing.

    And if they still want the money, screw 'em. They can have it in pennies.

    Taka

  • 0

    skipthesong

    I absolutely love how the same people that were crying about these bonuses and blaming everything under the sun on Obama and the Democrats are now trying to support Republicans on blocking legislation that would get the money back from bonuses of companies that took bailout money."

    no, i think most here you say are trying to support the repubs would most likely be like me and regardless of the party, I would support the measure simply because I never supported the idea of giving them money in the first place, but since its been given out, so be it. And I also think this is more grand standing than anything. If they go through and tax them 90%, I would be very very surprised.

    Also, "Are the politicians also receiving bailout money from the government?" In a way, yes they are. They just, all of them both side, voted to raise their salaries. Their benefits have increased year after year. Their kids schools are paid for by a tax payer fund. And let's not forget their retirements entitlements go up. Really, if you want to get rich these days, just become a politician and make sure you can jump party to party.

  • 0

    buddha4brains

    I agree with the Repubs on this - doesn't happen often.

    While the bonuses is a big chunk of change, it is chump change compared to the billions AIG paid out to foreign entities and American companies that had already received a first bailout (double dipping as it were). The more I read about this stinking pile of financial doo-doo the more I agree with Sen. Shelby who wants to slow things does a bit, assess what is really going on, and then act.

  • 0

    smithinjapan

    Skip: "no, i think most here you say are trying to support the repubs would most likely be like me and regardless of the party, I would support the measure simply because I never supported the idea of giving them money in the first place..."

    So you're just angry about what happened in the first place and are therefore supporting these people getting large bonuses from taxpayers money for a little 'even-Steven', regardless of the fact that you say you're against the money having been given out at all. Bizarre... very bizarre.

    "..., but since its been given out, so be it."

    Yeah... since one thing was done best not try to remedy it at all, eh, skip? Just let all your tax money go to bonuses when a company says the money is needed to save it, and not try to get any back. Good solution!

    "... And I also think this is more grand standing than anything."

    I agree they are to an extent pandering to the general outrage of the public, but they are also providing a means to get some of the money back. Now, if you want to talk about PURPOSELESS grandstanding... well... just read this article and look at the Republican side of stopping the legislature. Now THERE'S some genuine grandstanding!

  • 0

    smithinjapan

    buddha: "The more I read about this stinking pile of financial doo-doo the more I agree with Sen. Shelby who wants to slow things does a bit, assess what is really going on, and then act."

    What AIG has done most certainly needs to be looked at in depth and analyzed, but I fail to see how taxing the bonuses that come directly from the aid money is contrary to that.

  • 0

    sailwind

    Now, if you want to talk about PURPOSELESS grandstanding... well... just read this article and look at the Republican side of stopping the legislature. Now THERE'S some genuine grandstanding!

    Smith your thoughts on this part from the article?

    The Senate voted last month to block the AIG and other bonuses as part of the $787 billion stimulus bill, **but Democrats then watered down the measure allowing them **after Treasury Department officials warned that the move could trigger lawsuits against the government.

    I think that maybe your 'anger' at the Republicans is pretty misguided.

    Your target should be at the Democrats who give them the green light to pay the bonuses using TARP money. Why the pass on that Smith?

    The Senate is actually doing the prudent thing here for once, much to my suprise. Breaking or changing a legal contract that was already written no matter how bad it actually turned out in the long wrong, is never something that should be subject to whims of the moment.

    What's next Smith, we tear up the most important contract we have the constitution? After all that is all that piece of paper is. A contract between the people and the Government. We change that on a whim because we no longer like the freedom of press clause?

    Think Smith..........Unintended Consequences, if this isn't truly thought out and good legislation is not passed, you could very well see a serious erosion of personal freedom, it stinks that Congress and Obama authorized the pay out in first place. But they did and screwed up the first time, let's make sure they don't screw it the second time by passing rush legislation that very well set up a very bad precident on how the Government can break its already given promises at the drop of a dime.

  • 0

    SuperLib

    The shouldn't get the bonuses is what my moral compass says. But they had a contract and the government knew about it before they approved the bailouts. For that reason I'd rather them get the bonus as opposed to watching the government pull strings in response to the media. That scares me more.

  • 0

    Taka313

    Superlib,

    I agree with you. However, whether it is a corporation or the govt., the idea of voiding legitimate contracts in the interest of the "greater good" is what scares me.

    Once you start allowing contracts to be broken on a whim, no matter how legitimate the reason, you set an ugly precedent, in my opinion.

    Look at professional athletes, for example. They sign contracts with the owners for a specific salary, but now, for some reason, if they have a great year and feel deserving of more money, they hold out for a new contract.

    I don't know who started it, but once it happened, it became the norm. In my opinion, that's too slippery a slope to start down.

    Taka

  • 0

    buddha4brains

    smithinjapan I do not trust government when they go for populist sentiment to justify their actions. I did not trust Bush & Co. when they swayed public opinion towards their pet projects. I am not going to start with Obama. Like I said, it stinks no matter how many times you turn it over.

  • 0

    Wolfpack

    Hasty decisions make without sober consideration is what caused this problem to begin with. Usurping the Constitution is not the way to handle this issue. The government cannot target selected individuals for retribution. Besides, BO and the Democrats in Congress that so want to express their "outrage" through government coercion are the same people that pro-actively inserted legislation into the recent "porkulus" bill to allow them to have the bonuses. They were not upset about the bonuses then - now they are because they were caught helping out their major political donors.

    I don't think anyone in a failing business should get a bonus - why Obama, Geithner, and Dodd believe they do is pure political payback for the dollars given to the Democrat's during the last campaign.

  • 0

    SuperLib

    Taka313: However, whether it is a corporation or the govt., the idea of voiding legitimate contracts in the interest of the "greater good" is what scares me.

    Right, we're in the same boat. There's a cost to what they government's doing....but only a handful of people are talking about it. The government is essentially voiding a legal contract. Nice can of worms to open.

    I especially like the points about the government officials giving up their salaries. They were the ones who were supposed to provide oversight. Obviously they dropped the ball as well. Who's going to vote to tax their salaries at 90%?

  • 0

    Molenir

    The worst part about taxing the money back, is that it will mean a lot of really smart, talented people will quit AIG and look for employment elsewhere. Other banks from other countries are aware of this too. They won't even hesitate to poach the best employees. Add to this the likelihood that it will increase the credit crunch as banks and other financial institutions that received money rather then loaning money out, they're going to start trying to pay back the government in order to get out from under this and keep their people.

    The more you look at this, the more it stinks, even more then the bonuses. I say, poison pill or no, leave the bonuses. They shouldn't have been paid, but now that they have, eat the pill and move on. Just make sure it doesn't happen in the future.

  • 0

    Taka313

    Superlib, Thanks. That's why I have been lobbying here, and with my Congressman, to give them the bonuses in a very public setting. Let them accept their checks in front of a hoard of people they screwed.
    Would you accept millions of ill-gotten dollars in front of the people you just royally screwed? I am pretty sure that I don't have the stones to do something that callous.

    Taka

  • 0

    JoeBigs

    Molenir at 02:56 AM JST - 22nd March The worst part about taxing the money back, is that it will mean a lot of really smart, talented people will quit AIG and look for employment elsewhere.

    Are you talking about the same "really smart, talented people" that nearly bankrupted AIG? In my book (I am not a Republican) the folks at AIG who are getting these bonuses do not deserve them. I do not believe in giving money to folks that not good at their jobs.

    But again I am not a Republican.....I do not know why but this fiasco reminds me of Michael "Brownie" Brown.

    1. Giving bonuses to people who nearly bankrupted your compnay is really stupid.

    2. Giving bonus to the same people who nearly bankrupted our nation is criminal.

    So I say tax them for being really really stupid, it is our money. Oh wait tax them for everyone's share except Molenir's share. He likes giving his money to really stupid people.

  • 0

    buddha4brains

    Don't forget that while the dollar figure looks high, as a percentage of the bailout (which AIG will eventually pay back) the bonuses are only a 0.09% of the bailout.

    There seems to be more smoke than fire with this increasingly faux-issue. The Democrats are going to strangle themselves on this one if they are not careful (and they usually aren't).

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