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Taxing The AIG Bonuses

By Big Tent Democrat, Section Economy
Posted on Tue Mar 17, 2009 at 11:53:45 AM EST
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Via Atrios, Senate leader Reid proposes taxing the AIG bonuses:

Senate Democrats want to tax the controversial bonuses doled out to AIG employees who work for the division that led to the company's downfall. Senate Majority Leader Harry Reid announced on the Senate floor Tuesday that the tax-writing Senate Finance Committee will pursue a legislative fix in such a way that the "recipients of those bonuses will not be able to keep all their money — and that's an understatement."

[More...]

Senate Finance Committee Chairman Max Baucus, D-Montana, will propose a special tax within the next 24 hours, Reid said. "I don't think those bonuses should be paid," Baucus said Tuesday. At an unrelated hearing Tuesday at which IRS Commissioner Douglas Shulman was testifying, Baucus asked the nation's top tax official, "What's the highest excise tax we can impose that's sustainable in court?" Shulman did not respond directly, but Sen. Bill Nelson, D-Florida, chimed in to suggest the tax could be as high as "90 percent."

That's one way to get the bonuses back. Now about those counterparty payments, any stomach for an "excise tax" on those?

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    BTW (5.00 / 1) (#65)
    by glennmcgahee on Tue Mar 17, 2009 at 06:45:52 PM EST
    This Atrios, did it mention that Geitner knew all about the bonus stuff when he worked out the bail-out deal for them? The boy wonder. Now that we are outraged, so are they. I guess they just didn't figure we'd be paying attention while we worried about our retirement accounts and tried to hang on to our homes. We're all stupid you know.And Chris Dodd? Don't get me started. I'm asking what about all the money they sent for campaign cash to these politians. Where did those funds come from. Can we tax that money too?

    5 Billion (none / 0) (#67)
    by Amiss on Tue Mar 17, 2009 at 10:58:46 PM EST
    I'm asking what about all the money they sent for campaign cash to these politians. Where did those funds come from. Can we tax that money too?

    Was on one of the news shows tonite or today that $5 Billion came from Wall Street this past year.
    Not chump change, not even for Washington.

    Parent

    Would this only apply to AIG? (4.66 / 3) (#9)
    by nycstray on Tue Mar 17, 2009 at 12:15:09 PM EST
    Or would it stretch to some of those other bonuses handed out within the bailout circle of failure?

    Interesting.... (4.50 / 2) (#47)
    by jbindc on Tue Mar 17, 2009 at 01:44:21 PM EST
    Apparently, this outrage on Capitol Hill and at 1600 Penn Ave might be a bit misplaced.

    Link

    Here's something neither Obama nor Grassley answered in their bellicose remarks Monday: Why did it take so long for the president and senior lawmakers to get so worked up? More troubling, why did it take so long for them to discover AIG planned to give huge bonuses in the first place?

    Watching the coverage the past 24 hours, it would seem AIG just made public its plans to give top employees big bonuses. Wrong.

    AIG disclosed its retention-bonus program more than a year ago, including bonuses directed to those handling the exotic derivatives that got the company and the country into this mess.

    The bonuses were essentially a nonissue when AIG got its initial bailout money, almost $150 billion under President Bush in the two months surrounding the presidential election. Joe Biden, then the vice presidential nominee, came out strongly against the bailout. Obama did not.

    Timothy Geithner, then at the New York branch of the Federal Reserve, was a huge proponent and architect of the AIG bailout. So if Obama had strong private opposition to the idea it did not affect his pick for the person who would oversee all bailouts.

    The bonuses were again a nonissue when Obama himself increased the bailout to $173 billion last month.

    It's not like Republicans were any quicker to stop this impending "outrage." Grassley might want AIG employees to seriously think about suicide now but the Iowa senator, who has been the senior Republican on the Senate Finance Committee for nearly a decade, was seemingly unaware of AIG's publicly announced plans.

    If this were just a usual case of politicians acting like phonies people could roll their eyes and move on. But this time the competition among politicians to outdo each other in the outrage derby will soon put the White House, Congress and the country in a very tough spot.



    But of course (5.00 / 1) (#51)
    by Steve M on Tue Mar 17, 2009 at 02:18:46 PM EST
    the reason the politicians suddenly care now is that the people care now.  We all know that, I'm pretty sure.

    The people who are upset now would have been upset back then, if they had known about the bonuses back then.  If someone had said "hey, AIG is going to pay big bonuses using this bailout money," I'm confident the public would have been unhappy.

    So I'm not really concerned that the politicians are hypocrites.  In this instance, they're simply representing their constituents.  They're acting unhappy because the people are unhappy.  I'd feel differently if the politicians were actually the driving force behind the outrage, but they're not, and the fact that their outrage is phony is irrelevant to me when the public outrage is genuine.

    Parent

    Between Grassley's (none / 0) (#52)
    by oculus on Tue Mar 17, 2009 at 02:23:42 PM EST
    encouragement of suicide and Colbert's pitch fork, I'll be the bonus recipients are mighty glad they aren't on U.S. soil.

    Parent
    I am confident (5.00 / 1) (#54)
    by Steve M on Tue Mar 17, 2009 at 02:38:37 PM EST
    that they are cowering all the way to the bank.

    Parent
    Except (none / 0) (#60)
    by jbindc on Tue Mar 17, 2009 at 03:06:43 PM EST
    I guess that we hope our politicians act in the best interest of the people on the information that the public may not have yet, such as the fact that they knew these bonuses were going to be paid out last year.

    But of course, I know that's a pipe dream.....

    Parent

    I'm fairly certain (4.50 / 2) (#53)
    by Makarov on Tue Mar 17, 2009 at 02:30:39 PM EST
    that the AIG division that nearly sank the company is in London. While I assume some of the employees there may be Americans, a good share (perhaps a majority) may not be, and therefore are not subject to taxes from Uncle Sam.

    I wish someone in Congress had the balls to end all this crap simply - and tax upper incomes more aggressively. Let's go back to what we had before Vietnam - with income above X (let's call it $500K) taxed at 90%.

    Alternatively, they could pass a law limiting public companies to paying any individual more than, say, 20x their average worker. If the average worker makes $50K, then the CEO/execs/traders can make up to $1M. This would obviously have to include staff like those who answer the phones and vacuum the floors, with a provision against using outsourcing and/or temp agencies.

    But the counterparty payments (none / 0) (#1)
    by Steve M on Tue Mar 17, 2009 at 11:56:27 AM EST
    were the whole point, weren't they?

    Not my point (none / 0) (#2)
    by Big Tent Democrat on Tue Mar 17, 2009 at 12:04:23 PM EST
    They need to take some of the hit, do it through the tax code if you must.

    Parent
    Pleading ignorance...why would that not be a (none / 0) (#10)
    by steviez314 on Tue Mar 17, 2009 at 12:15:34 PM EST
    Bill of Attainder?

    A punitive excise tax on a group of easily identifiable individuals?  It's not related to a tax bracket, like a millionaire's tax, or a product, like an excise tax on crude oil.

    Also, I assume you can't retroactively tax the 2008 payments.

    Parent

    I don't know (5.00 / 3) (#16)
    by Big Tent Democrat on Tue Mar 17, 2009 at 12:21:55 PM EST
    If only AIG is subjected to it, you may have an argument. I think the more likely result is a tax on ALL bailed out companies.

    I think that will hold up just fine.

    Parent

    Nope - tax is wholly civil (5.00 / 4) (#29)
    by scribe on Tue Mar 17, 2009 at 12:30:40 PM EST
    and can be both retroactive and directed at a specific class of people or activity.

    The trick - and it's so easy a law student could do it - is to draft the tax so that it is facially neutral, even though it clearly only applies to certain people or activities.

    Thus, it would be perfectly legitimate to impose a tax of 90 percent on all compensation in excess of $50,000 paid and/or received by persons in regard to work performed in 2008 or thereafter in service of a corporation whose principal office in 2008 was in Connecticut and which in 2008 maintained an office in London, England, and which work pertained to CDOs, CDSs or any combination of them.

    They used to be called "rifle shots", back pre the 1986 tax reform act.  In those days, Congress would include obscurely-written clauses in bills, usually providing for tax relief.  They would apply, for example, to all corporations incorporated in Delaware on July 15, 1916 (or some other obscure date) and presently having a principal place of business in Michigan (i.e., only to Ford Motor Co.), and were usually used to allow corporations (or wealthy individuals - Trump used to get some) to get around depreciation rules.

    Funny, I think Reid might have been reading the comments here, particularly this, this and this .

    Great minds think alike.

    Parent

    thanks for the info (5.00 / 1) (#32)
    by Militarytracy on Tue Mar 17, 2009 at 12:32:03 PM EST


    Parent
    well done, (5.00 / 1) (#44)
    by cpinva on Tue Mar 17, 2009 at 01:22:55 PM EST
    grasshopper!

    The trick - and it's so easy a law student could do it - is to draft the tax so that it is facially neutral, even though it clearly only applies to certain people or activities.

    if you actually looked through the IRC, you would find multiple examples of code sections that meet this exact prescription, though on the surface they appear totally innocuous.

    the best part is, they're nearly suit proof, so any AIG exec subject to it would just have to bite the bullet.

    Parent

    Could Be An Interesting ... (none / 0) (#50)
    by santarita on Tue Mar 17, 2009 at 02:16:31 PM EST
    backdoor way to increase taxes on the top 1%.   If you can tax at a 100% a group of individuals that make a certain $$$ from one particular company or a group of companies, why not just take the next step and tax at a higher rate everyone that makes a certain $$$ amount.  I'd be interested to see the Republican reaction.

    Parent
    Enough with... (5.00 / 2) (#56)
    by kdog on Tue Mar 17, 2009 at 02:48:54 PM EST
    backdoor shadyness...anything worth doing is worth doing through the front door in the light of the day.

    Parent
    agreed. (none / 0) (#68)
    by cpinva on Wed Mar 18, 2009 at 12:57:20 AM EST
    anything worth doing is worth doing through the front door in the light of the day.

    and really, it isn't nearly as much fun, if they don't realize it's being done to them.

    Parent

    Skinning that cat! (none / 0) (#3)
    by Militarytracy on Tue Mar 17, 2009 at 12:05:32 PM EST


    I'm not sure (none / 0) (#4)
    by Bemused on Tue Mar 17, 2009 at 12:06:42 PM EST
      such legislation could be constitutional that would so impose a tax on such a narrow and specific class. Equal protection grounds might exist facially and even more likely as applied if the express purpose of an act is to take money from people Congress doesn't think they should have.

     

    Rational basis test (5.00 / 3) (#11)
    by Big Tent Democrat on Tue Mar 17, 2009 at 12:16:59 PM EST
    Not gender or race based.

    "Iowa statutes taxing adjusted revenues from slot machines on excursion riverboats at maximum rate of 20 percent, but providing for maximum tax rate of 36 percent on adjusted revenues from slot machines at racetracks did not violate Federal Constitution's Equal Protection Clause; rational legislator could believe that legislation's grant to racetracks of authority to operate slot machines would help racetracks economically to some degree, even if its simultaneous imposition of tax on slot machine adjusted revenue meant that the law provided less help than track owners might like."

    Fitzgerald v. Racing Ass'n of Central Iowa
    539 U.S. 103, 123 S.Ct. 2156 U.S.Iowa, 2003.

    Not sure how this will withstand a "morality" challenge.

    Parent

    there (none / 0) (#15)
    by Bemused on Tue Mar 17, 2009 at 12:21:30 PM EST
      the state articulated a rational basis for taxing slots at the higher rate  

      What's the rational basis for singling out AIG employees as opposed to other highly compensated people who work elsewhere and may have been paid a lot when their companies performed poorly.

    Parent

    Bailed out companies (5.00 / 4) (#19)
    by Big Tent Democrat on Tue Mar 17, 2009 at 12:23:37 PM EST
    is the likely provision to come.

    Rational basis is simple - to insure that bail out funds are not directed in this manner as this undermines the Nation's confidence in the financial system.

    But face it, when has the Court ever struck down on the rational basis test? Few and far between.

    Once the standard is established, the chances of defeating the government on this are slim to none.

    Parent

    IF (none / 0) (#26)
    by Bemused on Tue Mar 17, 2009 at 12:29:35 PM EST
      a law was enacted that imposed an excise tax on all monies received above a certain threshhold by all people who work at any company which received certain classes of federal assistance that would likely pass the rational basis analysis under the EPC.

     

    Parent

    Talking like that (none / 0) (#5)
    by Militarytracy on Tue Mar 17, 2009 at 12:08:13 PM EST
    you are just going to kindle wildly fresh lawyers and bottom of the ocean jokes.

    Parent
    do you have a problem (none / 0) (#12)
    by Bemused on Tue Mar 17, 2009 at 12:17:29 PM EST
     with the Equal Protection Clause? It kind of losing force if we decide not everyone is entitled to equal protection.

      The problem is drafting legislation that imposes a tax on certain persons that other people who are similarly situated do not have to pay. I don't think there would be much question that a law that said AIG executives have to pay __% in excise taxes on this bonus money would be unconstitutional.

      So, Congress would have to draft a law establishng a special class of income on which such an "excise" tax is imposed that would both apply to all the AIG folks and anyone else who has a portion of their income which meets the criteria. But, if the criteria are established in such a fashion that they in effect single out a tiny number of executives at a specific firm I think you still have very strong EP arguments.

      That argument is only helped if you have a legislative history where Congressmen are stating their objective is to single them out for special taxation.  

     

    Parent

    I have no problem (5.00 / 3) (#18)
    by Militarytracy on Tue Mar 17, 2009 at 12:22:55 PM EST
    with the Equal Protection Clause.  In the real world though there is also the politics of crime and the people are furious beyond all past social fury recognition.  Fully expect any laws that protect the lawless to be HEAVILY CHALLENGED and freshly redefined whether you or I like it or not.

    Parent
    No one (5.00 / 1) (#35)
    by Categorically Imperative on Tue Mar 17, 2009 at 12:34:01 PM EST
    is similarly situated to AIG in any meaningful sense that could be applied to the proposed tax.  The government could easily articulate a rational basis for the law.  There is no real danger of a credible EPC challenge, unless the courts decide that Wall Street crooks are suddenly a protected class meriting strict scrutiny.

    Parent
    Heh (none / 0) (#14)
    by Big Tent Democrat on Tue Mar 17, 2009 at 12:19:50 PM EST
    Well, now you declare yourself the sole arbiter of the EPC.

    Your moralizing is getting old quick I must admit.

    Parent

    It is a little scary.... (none / 0) (#17)
    by kdog on Tue Mar 17, 2009 at 12:22:39 PM EST
    what if next week the state decides to tax anyone with a non-violent drug arrest at 95%.  Slippery slope and unintended consequences and all.

    Better I think not to play legislative games, we own 80% and have the power to just say no.  And if AIG balks, no more handoutsm, let them fail.  If the contract workers balk, let them sue.  

    Parent

    Hmm (none / 0) (#21)
    by Big Tent Democrat on Tue Mar 17, 2009 at 12:25:18 PM EST
    That would be a punishment issue and I think imposing it on released persons is a different ball of wax constitutionally speaking.

    Of course, there are already forfeiture laws in place so if that is your concern, the horse is out of the barn.

    Parent

    A poor example.... (5.00 / 0) (#31)
    by kdog on Tue Mar 17, 2009 at 12:31:33 PM EST
    perhaps...I'm just thinking of congress arbitrarily taxing whatever sub-group is unpopular at any particular moment in time at 95% rates.

    Yeah, we're all fans of it now because they are going after con-artists...but what about next time?

    Parent

    You mean like people making (none / 0) (#33)
    by Big Tent Democrat on Tue Mar 17, 2009 at 12:32:32 PM EST
    over 1 million a year?

    Parent
    Maybe... (none / 0) (#39)
    by kdog on Tue Mar 17, 2009 at 12:38:40 PM EST
    or say pornographers...a lot people have a problem with how they make a living...suppose a powerful christian coalition lobby convinced enough congress-critters to vote to tax  pornographers income at 95%?

    Parent
    Well (none / 0) (#40)
    by Big Tent Democrat on Tue Mar 17, 2009 at 12:40:24 PM EST
    I guess I am less worried about that than you are.

    Parent
    If the pornographer law were written, (none / 0) (#57)
    by jeffinalabama on Tue Mar 17, 2009 at 03:00:39 PM EST
    I think a good lawyer could make a First Amendment case on it.

    Parent
    Ya think? (none / 0) (#61)
    by kdog on Tue Mar 17, 2009 at 03:07:06 PM EST
    I'm no lawyer, but I would assume as long as they retain the right to publish pornography, they have no first amendment case in reagrds to their tax rate.

    I think Congress has the power to pretty much tax as they like...especially if this flies.

    Parent

    actually, (none / 0) (#69)
    by cpinva on Wed Mar 18, 2009 at 01:11:47 AM EST
    You mean like people making over 1 million a year?

    we kind of do.

    we disallow, as a deduction, compensation in excess of 1 million dollars, to certain employees of publicly held companies, on the corp's tax return. the excess is a Sch. M-3 adjustment.

    that's why so many received stock warrants, options, etc, instead of cash; the non-cash wasn't included in the computation of compensation, solely for purposes of this code section.

    this all came about as the consequence of the proliferation of outrageous "golden parachute" payments, made to departing upper managers of sold companies, to the detriment of both the company and sh's.

    ain't mergers and acquisitions fun?

    Parent

    I think this is going to happen (none / 0) (#6)
    by andgarden on Tue Mar 17, 2009 at 12:09:11 PM EST


    Me too (none / 0) (#7)
    by Militarytracy on Tue Mar 17, 2009 at 12:12:28 PM EST


    Parent
    Are these the musing of a free trader? (none / 0) (#8)
    by oculus on Tue Mar 17, 2009 at 12:13:41 PM EST


    I don't like the tax idea (none / 0) (#13)
    by joanneleon on Tue Mar 17, 2009 at 12:17:57 PM EST
    and I hope that AIG pulls back the bonuses before it happens.  I'd much rather see Cuomo examine the contracts and perhaps find that they don't hold water.  Or have the Treasury step into the AIG boardroom and demand that they break the contracts.

    However, I do want something to happen right away, so maybe the tax is the only thing that can be done immediately.  The thing is, when will this tax be payable?  Are we going to have to wait until next April 15th, have to deal with collections for people who can't pay, perhaps have them declare bankruptcy, or in the meantime get into court battles and such?  If they are going to do something radical like this, I say assess the tax and make it payable in the quarter in which the compensation was received.  In other words, the tax would be due in fourteen days.

    The tax solution seems quick and simple, but it's really not.

    Meanwhile, it seems that some of the bonus money is already out the door, starting last Friday.  But much of it is payable over a number of months/years.

    this tax idea (none / 0) (#20)
    by Bemused on Tue Mar 17, 2009 at 12:23:53 PM EST
     is transaparent Republican grandstanding.

      They are simply trying to position the Democrats who fail to go for it as not being truly out for the common man so they can use that line to oppose other Democratic initiatives.

    Parent

    Reid and Baucus and Dodd (5.00 / 1) (#22)
    by Big Tent Democrat on Tue Mar 17, 2009 at 12:26:06 PM EST
    are Democrats, if it is grandstanding, it is Democratic grandstanding.

    Parent
    With the current sentiment (none / 0) (#27)
    by joanneleon on Tue Mar 17, 2009 at 12:30:08 PM EST
    I doubt that a ploy to paint Dems as not being for the common man will work.  Also, it's not just the Republicans coming up with the tax ideas and bills in Congress.  I think it is all of Congress looking for a quick fix to part of a bigger problem.  In the IT world, we'd call it a "quick and dirty" fix, a bandaid or a "kluge".

    Parent
    If the money is out the door (none / 0) (#66)
    by Amiss on Tue Mar 17, 2009 at 10:52:01 PM EST
    it seems that some of the bonus money is already out the door

    Any electronic transaction can be rescinded. It is done in business every day.

    I believe they are going to offer AIG the opportunity to retrieve the monies and renegotiate the contracts and if they refuse then they will go the tax route, if I understood the news later tonite correctly. Also this tax would only be on employees of businesses whose ownership is basically the American taxpayer at a certain percentage such as in the case of AIG, the business is into the taxpayer for at least 79% ownership, they would impose the tax at say an additional 70-75% in addition to the usual taxes that are already imposed, bringing the tax up to the 95% to 100 % total tax imposed.

    I like the idea of the tax being paid in the quarter in which it is earned.

    Someone please correct me if I am wrong on the analogy here.

    Parent

    I think this is a BS solution. (none / 0) (#24)
    by sarcastic unnamed one on Tue Mar 17, 2009 at 12:28:01 PM EST
    Lotsa bitter shi**y little people running around this world, I really don't want my congress/IRS to add to the collection.

    Maybe someone in congress should have thought about exec compensation before they voted for the bailout. There are way bigger fish to fry.

    In the grand scheme of things this 150M, or whatever, is but a tiny drop in a huge ocean. Lesson learned. Move on.


    Note that this is in response to the idea of a (none / 0) (#28)
    by sarcastic unnamed one on Tue Mar 17, 2009 at 12:30:28 PM EST
    "AIG exec only" tax. An across-the-bail-out-board tax would be much more palatable.

    Parent
    Geez (none / 0) (#37)
    by joanneleon on Tue Mar 17, 2009 at 12:36:54 PM EST
    You sound just like some of the people on CNBC, including Rick Santelli, when he was talking about it yesterday.

    Parent
    No idea what your point is. (none / 0) (#48)
    by sarcastic unnamed one on Tue Mar 17, 2009 at 01:49:20 PM EST


    Parent
    What about all those 100's of billions (none / 0) (#34)
    by sarcastic unnamed one on Tue Mar 17, 2009 at 12:33:34 PM EST
    that went through AIG to foreign banks and financial institutions like sh*t through a goose, shouldn't we recapture our money used for their exec bonuses?

    Agree (5.00 / 2) (#36)
    by Big Tent Democrat on Tue Mar 17, 2009 at 12:36:28 PM EST
    that recapture of those funds through the taxing power could occur as well. And not just for foreign entities.

    Make Goldman pay a tax on the 12B they got as well.

    Parent

    Counterparty payments (none / 0) (#42)
    by joanneleon on Tue Mar 17, 2009 at 12:49:52 PM EST
    This is what you're talking about when you refer to counterparty payments, no?

    Parent
    That subject has been coming up a lot in the news (5.00 / 1) (#41)
    by joanneleon on Tue Mar 17, 2009 at 12:41:47 PM EST
    This can't just apply to AIG.  As a woman on MSNBC just said, and we all know, bonus issues are widespread.  I'm not sure how many people realize that the AIG money was just passing through to big banks because I'm not sure how widespread is the understanding of the credit default swaps.  But as they realize this, I would hope the call for bonus claw backs in some form is legion.  Thain is being investigated for the Merrill last minute bonuses.  So why not all the others?

    It seems like they are only addressing the ones that cause a huge public outcry, and that's not the way to do this.  Obama and his admin. and Congress need to be out ahead of this.

    Parent

    The problem with that is (none / 0) (#38)
    by Categorically Imperative on Tue Mar 17, 2009 at 12:37:18 PM EST
    Geithner and Summers are good buddies with the board at Goldman, who is AIG's largest counterparty (I think...if not the largest, a significant one).  

    If I recall correctly, last year $12B of taxpayer cash got funneled to Goldman through AIG.

    Parent

    End the Stupidity (none / 0) (#43)
    by bselznick on Tue Mar 17, 2009 at 12:53:55 PM EST
    Give them the bonus money and then tax it at 100%.  Apply this tax code to all companies accepting government bailout money.

    Now plese move on to more important matters.

    Execs left after "retention" bonus paid (none / 0) (#45)
    by jbindc on Tue Mar 17, 2009 at 01:23:00 PM EST
    It just gets curiouser and curiouser..

    AIG paid 73 employees bonuses of more than $1 million, New York Attorney General Andrew Cuomo informed Congress in a letter Tuesday.
    Congress is looking at ways to deal with the outrage surrounding AIG's controversial bonuses.

    Cuomo also wrote that 11 of the employees no longer work for the company. The largest bonus paid was $6.4 million and seven more people received more than $4 million each.

    "Until we obtain the names of these individuals, it is impossible to determine when and why they left the firm and how it is that they received these payments," Cuomo wrote to a congressional committee.

    AIG has been under fire for awarding seven-figure bonuses to employees while being kept afloat by more than $170 billion from the U.S. government's financial bailout.

    The company insists the payouts are needed to keep talented executives on the payroll, but public anger over the moves has prompted Congress and the Obama administration to seek some ways to reclaim the money.
    Does this fall under the heading of (5.00 / 0) (#46)
    by nycstray on Tue Mar 17, 2009 at 01:43:23 PM EST
    "When is a retention bonus not?"

    Talk about a train wreck . . . .

    Parent

    What triggered this rage now? (none / 0) (#49)
    by NYShooter on Tue Mar 17, 2009 at 01:53:13 PM EST
    We gave 350 BILLION Tarp 1 money with NO strings attached, and NO requirement to let us know how they spent it. We do know billions went for bonuses.

    And, Merrill Lynch executives got four BILLION dollars just before they went down, folded into B of A.

    What was it about a measley 165 million, and we're not even sure what kind of bonuses they are,that set off this firestorm?

    Good question... (none / 0) (#55)
    by kdog on Tue Mar 17, 2009 at 02:44:38 PM EST
    the straw that broke the camel's back maybe?

    Or more likely, when Uncle Sam was giving out all those billions before, we the people we're too afraid to be angry or ask questions...we bought the fear of bread lines or a total economic collapse that the con-artists were selling.

    Similar to the fear that was peddled prior to the invasion of Iraq...they've got playing us down to a science.

    Parent

    Sounds like Bill needs (none / 0) (#58)
    by jondee on Tue Mar 17, 2009 at 03:02:27 PM EST
    to come back and do away again with welfare as we know it; this time not restricting the reforms to policing the gross abuses of ten-year-old Cadillac driving women with six malnourished kids.

    Parent
    TARP legislation has an exception for bonuses! (none / 0) (#59)
    by Abdul Abulbul Amir on Tue Mar 17, 2009 at 03:02:46 PM EST
    Thanks to Senator Dodd.

    The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.

    Hey, everything changed (5.00 / 1) (#62)
    by jondee on Tue Mar 17, 2009 at 03:11:05 PM EST
    after 9..I mean, after this financial crisis hit.

    All we have to do is draft new legislation.

    You're either with or agin' us, boy.

    Parent

    Incredible that the US Congress (none / 0) (#63)
    by pluege on Tue Mar 17, 2009 at 03:52:37 PM EST
    would be tied up in a company's bonus provisions. Not that something didn't need to be done, just that the corporate plutocratic world has become so detached from reality and the American people that Congress has to step in on a case by case basis.
    via who? (none / 0) (#64)
    by glennmcgahee on Tue Mar 17, 2009 at 06:37:43 PM EST
    Atrios? Is that a news publication in France or something?

    Bill of Attainder (none / 0) (#70)
    by carnitasrule on Wed Mar 18, 2009 at 07:59:18 PM EST
    This "tax" would most certainly be unconstitutional. It is laughable when the people pointing the fingers are they very people responsible for this entire mess. We can thank Barney Frank, Dodd and Clinton for this treachery.  If they are looking for those responsible, they can look no further than their own back yards. You don't give a child a $10 bill, send them into a candy store and say, "this is for you"...and then scold them, when you find out they bought candy with it! They gave no restrictions on this TARP money. Shame on them! These retention bonus contracts have been known for over a year. Dodd put the language in the ARRA, himself, that protects them. They are legal contracts.  
    Congress cannot pick out who to "punish" deeming itself judge and jury and supplant the judicial branch. Our founding "fathers" were leary of just such a misuse of power!
    "Bills of attainder, ex post facto laws, and laws impairing the obligations of contracts, are contrary to the first principles of the social compact, and to every principle of sound legislation. ... The sober people of America are weary of the fluctuating policy which has directed the public councils. They have seen with regret and indignation that sudden changes and legislative interferences, in cases affecting personal rights, become jobs in the hands of enterprising and influential speculators, and snares to the more-industrious and less-informed part of the community."

    Taxing The AIG Bonuses | 67 comments (67 topical)

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