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Today, the House of Representatives passed a bill, 328-93, that would put a 90% tax on bonuses from financial firms receiving bailout funds, such as AIG. One of the bill's cosponsors, Rep. Carolyn Maloney (D-Manhattan), who proposed a 100% tax earlier, said, "I’m proud that the House has taken action to return these bonuses to the federal treasury... It would be morally reprehensible and fiscally irresponsible to allow millions to go to those who cost our country billions. Bonuses should be based on creating value, not destroying it."
However, six Democrats opposed the bill. Politico reports, "Since Wall Street pays much of employee salaries in the form of yearly bonuses, the legislation would hit any employee at bailout recipient firms that makes more than $200,000, or who has a combined income with a spouse of more than $250,000, critics say." Rep. Michael McMahon (D-Staten Island) said, "Just like many of my colleagues, I abhor and vehemently condemn AIG’s payment of millions of dollars in bonuses. However, I felt that this legislation was too broad, was punitive without being targeted enough, and would ultimately have an adverse effect for many of my constituents in Staten Island and Brooklyn, who are honest employees in the financial services industry.” Of course, another question is whether the tax is even constitutional.
And at AIG, the company's corporate security sent a memo to employees warning them that the public's outrage could make them targets. Gawker has the memo, which includes helpful advice like avoid wearing AIG apparel (t-shirts, totes), do not leave your AIG badge visible outside of the office, "At night, when possible, travel in pairs" and "Avoid any public conversations involving, AIG."
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How many dependents do you need not to pay taxes on a million dollars?
A lot of CPAs will be working overtime to find those loopholes.
Not too helpful for all the AIG bonuses paid to executives who don't live in the U.S....
This seems like an ex post facto law.
"At night, when possible, travel in pairs" and "Avoid any public conversations involving, AIG."
...and do not fu*k anyone else in the public over by taking millions of dollars in frivolous disposable income bonuses to put in offshore accounts while running our company into insolvency when millions of unemployed and homeless people because of what you did to them and the economy are living in tent cities like in Sacramento and not even sure when their next meal will come from.
So they pass a law to distract us from the fact that congress let this happen in the first place. Never mind that there is no way this law is legal. Then add the fact that a lot of this bonus money is being paid to AIG employees in London, who are British and will not be taxed.
The only thing more obscene than the way so many on Wall Street have behaved is that people seem to think congress is riding to our rescue.
Indeed, the theater around the AIG bonuses has become very tiresome. The money in question is a tiny, tiny fraction of the huge sums given to these people and others. Nothing substantial has been done. The same people who set up the debacle are still in high office profiting from it.
This over reaching is scary as hell. Good thing our forefathers thought to protect us by making this unconstitutional.
...and people were concerned about wiretaps on international phone calls!
Wait until they start doing this to gas station attendants in the name of global warming, and sports shop owners in the name of gun control.
AIG bonus recipients who live in NYC, which I'd guess is a good number of them, will actually owe more than they received when they're done adding Medicare, state and city taxes to that 90% tax.
It's good to see I'm not the only one who thinks this law sounds unconstitutional.
But I've yet to hear anybody on ABC, CBS or NBC say it.
90% tax?, a brilliant way to retain talent at any firm
that memo was great. made me realize who the new 'victims' of this scandal are. poor, poor AIG employees.
What if an AIG employee has already submitted their tax forms? We're already nearly a quarter of the way into 2009; it's a bit late to change things for 2008.
So this 90% the government is stealing - er, taking from AIG bonuses - the government will spend this money wisely? As they do with all of our taxes?
It's probably better for the US economy if AIG folks are allowed to keep their bonuses - and put it back into the economy.
How is it stealing when it wasn't their money to begin with? How does a bankrupt company have enough money to pay bonuses, because that's what this pretty much boils down to?
AIG was contractually bound to pay this money. The best way to drive the company into the ground and ensure the government and taxpayers get no return on their investment is for Congress to start micromanaging AIG's business decisions.
Something tells me those contracts say something about bonuses being tied to performance. And the only reason AIG did not show poor performance on their books is because they were bailed out. Therefore, a good lawyer would be able to show that those bonuses were given away unlawfully and should be taken back. I don't want Congress micromanaging anything, much less AIG, but I also don't know that it would matter. Where's the guarantee that if they keep their hands out of it that AIG will actually produce a return on our investment? And if it is truly an investment by the taxpayers, then where are they hiding my stock portfolio? And how many shares do I now own?
Ask the Obama administration.
yes but when will the tax be due, next year?