Taxing bonuses a good idea?
People protest against corporate bailouts in front of AIG's Los Angeles office.(PHOTO CREDIT: GABRIEL BOUYS/AFP/GETTY IMAGES)
FROM CNN's Jack Cafferty:
There seems to be plenty of opposition to the House of Representatives' bonus tax plan - including perhaps President Obama himself.
In a move that many saw as "grandstanding," the House rushed through that 90 percent tax on bonuses of big earners at bailed-out financial institutions last week. The measure came in response to news that AIG paid out at least $165 million in bonuses - after getting $170 billion in taxpayer bailout money.
But in an interview with "60 Minutes," the president questioned the legality and constitutionality of the tax; and said that he wouldn't "govern out of anger." Nonetheless, Mr. Obama vowed to make Wall Street understand it must do away with "the old way of doing business."
He said the Senate would produce a very different and more acceptable version of the the bonus tax bill; maybe one he could sign.
Also coming out against the tax were other top administration officials - the vice president's top economic adviser, Jared Bernstein, said it "may be a dangerous way to go." And the chair of the White House Council of Economic Advisers, Christina Romer, said the president favors creating a federal "resolution authority" over bailed-out financial institutions which would allow a judge to void the kind of contracts that let AIG pay out the bonuses.
Meanwhile the American public clearly wants that money back. A new Gallup poll shows 76 percent of those surveyed want the government to intervene to block or recover the AIG bonuses.
Here's my question to you: Is it a good idea to tax bonuses?
Interested to know which ones made it on air?
David from San Diego writes:
The public's confidence in private enterprise will not be restored until there is some effective control over the excessive, undererved compensation received by many executives. Tax policy may not be the most useful way to address this, but "interlocking directorates" and the belief that one's top employees are "too big to fail" has led to an imbalance that must be corrected somehow.
Calvin writes:
Taxing the bonuses is not a good idea. A contract is a contract whether right or not. Too many Americans today are complaining about "big brother" being too invasive already. Imagine the turmoil that would be caused by a 90 percent tax on a bonus just because the government did not think you deserved it.
Joe from Missouri writes:
If the government can target rich CEOs, they can target you. I hate the bonuses, but creating special taxes to target groups you don't like is a bad idea.
Amy writes:
While I believe the bonuses were absurd, this law is unconstitutional. The Constitution prohibits ex post facto laws. End of discussion.
S. writes:
The gap that allowed the bonuses to have been paid is the problem. Going after the recipients now is closing the barn door after the horse has vacated. Congress is half-assing this stuff and we're left holding the bag. Morons.
Joseph writes:
From my perspective, these companies sacrificed their right to avoid such strict government oversight when they begged that same government to interfere.
Sarah writes:
Why not? They get to keep 10 percent of it for doing a bad job.
@jackcafferty on Twitter
As much as I'd like to see the employees pay for ruining an international corporation, I think this proposed law sets a very dangerous precedent. Doesn't the Constitution forbid retroactive laws?
What's next? I drive 30 mph on a street with a speed limit of 30. Then a school is built, the speed limit changes to 20, and they use the cameras to find and fine those of us who were driving 30 mph months or years earlier?
It's a ridiculous proposal, which, I assume, is only designed so that Congress can rail against the bonuses just so their constituents can see them on tv. But then everything Congress does is for getting reelected. It doesn't have to make sense, just get them more votes. As someone said on "The West Wing" tv show, "I'm so sick of Congress I could vomit."
Anne
Texas
We should find a way to bring to book all those executives who decided to take the money and run away.
No. It is not a good idea to pass any law on emotion. People are rightfully angry about the bonuses and they should never have been paid. It would have been nice if the bonuses had been addressed as a condition of the loan of the money. This should be taken care of in the future.
I want the money back too, but not by a draconian and unconstitutional tax policy. And while we're talking about this, I'm getting a little tired of the way the media is portraying the public. Yes, there's a few crazies out here screaming, "Off with their heads." Most of us, however, are more interested in having regulations put in place so that the practices that lost us all trillions of dollars and millions of jobs don't happen again in the future.
Tim in Texas
No, it's not a good idea. Nationalizing and firing everyone would be better. Taking them to court to retrieve our money is better. Not giving them anymore money is better. Capping their salaries is better. Treating them like a public utility is better. Taking out the good sections of AIG and letting the rest file Chapter 11 is better. Americans are taking sides. Obama needs to do the same. The time for moderating and negotiating is over, no matter how many times he goes on the teli.
It's a dumb idea, Jack. The 90% tax should be extended to included all income in excess of 5 or 6 million dollars. Then, reign in the Bush tax give aways to the rich. Don't wait 'til 2010.
The House bill is unconstitutional because it's ex post facto and is meant to punish. It's understandable, but a dumb waste of time.
Rich Green
San Clemente, Cal.
Sure why not. It's a moral victory that will make us feel better.
But the real people who created the problems for the country are already long gone with their millions in offshore banks.
This is just an effort by those legislators who missed the boat to make amends and use the opportunity to deflect blame and garner support form the ill informed. Better to let this 1% of the package mistake be a lesson for future actions, get onside with the big picture and work with all to get the world out of this financial mess. Those recipients of this BONUS payment who keep them won’t get another chance and will have to live with their smarmy action while those who turned it back or down will be looking good.
A joke it was. Our money is long gone. The best we can hope for is to not let it happen in the future. What i wan`t to know is, what about all the fat cat`s that are due bonuses from the stimulus on the state level?
This is a very very bad idea. Bonuses are already taxed too high and if the government uses this approach to get money back from people at AIG, they are only going to remove one of the incentives that other companies use to reward those who actually perform. If the government had any real backbone, they would take a more direct approach and just violate the contracts to keep these reptiles from their undeserved bonuses. They need to quit letting the lawyers and their ridiculous contractual terms set the stage for national policy. I guarantee you that if the IRS wants to go after anyone with relentless pursuit, they would get away with screwing over any honest taxpayer and the government is OK with setting those terms. Congress needs to quit playing politics as usual, get a spine and simply go after these high paid criminals on Wall Street. That’s not so difficult.
HD in Phoenix
When your receiving a bonus from a company you helped ruin, the answer is unequivocally yes, tax the bonus at 100%
I find it very wrong that the libs are planning on making the tax system more confiscatory than it already is. Alarming, hard work and success are bad words now out there in lib land.
Absolutely! These crooks have lost touch with reality. Let them live on my income for a week. They wouldn't survive. Why should these crooks who created this problem be rewarded for incompetance!
Unfortunately NO! But my first thought is YES! Just to get even. But I would have waited until they spent it first.
Isn't the issue you / CNN seem to ignore is WHY the AIG bonus issue even occurred? If CNN would exercise some objective journalism (would be a nice change) your facts would reveal that the original bill had specific language controlling bonus payouts by AIG HOWEVER, Senator Chris Dodd attached a rider to the bill which Obama signed that OVERTURNed these controls and allowing the bonuses to occur which Obama signed off on. It is pathetic listening to Obama and Dodd play dodge ball with this issue and pointing fingers at everyone but themselves...oh, by the way...the top recipients of campaign contributions by AIG are....you guessed it...Chris Dodd and Barack Obama!
Congress most think we are all stupid. They allowed the bonus my putting on the loophole that permitted them and now they are going postal because AIG gave out bonuses. The bonuses are a disgrace but singling them out for a higher tax rate is unconstitutional.
Has anyone else noticed that here in Houston, Tx. that the AIG building near downtown does not have it's big "AIG" lights on anymore. been this way for about two weeks or more now. Are they trying to save on electricity or what?
Obama has this one right. Punitive taxes are never good tax policy.
No, Just don't give them, especially when the bonuses are given by the taxpayers.
As much as I would like to say yes, tax the money, I doubt that the tax would hold up in Court if challenged. Since it is taxpayer money basically running AIG, I believe all those so-called contracts need to be re-written with strict salary limitations and the new contract calling for the repayment of the bonus money. Anyone not returning the money should be fired and sued along with their names and pictures being released to every major media outlet in this country.
I don't care if they have to mug these culprits in order to get the money back. We have been putting up with tax loop holes for way too many years now, and it is time to do something about it. Same goes for those who are putting their money in secret bank accounts in order to beat the tax system.
Why tax? Make it illegal for any company, aided by taxpayers, to award retention/performance bonuses. The house passed this bill knowing it will be thrown out in court, while bonuses continue to be paid- you watch! There can be no solution as long as Wall st. can donate to the very people responsible for oversight of Wall st. It's time we ask, who's working for who?
Jack, No. These are signing bonuses just like you would give to a football player there is no way for a company to know if they are worth it . I consider this issue to be a misdirect just like a story about Britney Spears or O.J. Something to plaster all over the news to draw attention from the real issues. How were these companies allowed to become so big, so powerful, so important to the economies of the world that they could not be allowed to fail? This seems dangerously stupid, even to a dumb old boy like me. Jack from Nice Ca.
Tax all income. The country didn't do all that badly since World War II. Bring back the Truman and Eisenhower tax rates. Let government start functioning again and see what happens.
First of all it's unconstitutional to use taxation for punitive reasons. Second, there has been much ballyhoo about these bonuses which are primarily retention rather than reward. Corporations use them to retain talent which is much desired by other corporate head hunters.
Thirdly, these bonuses are miniscule compared to the entirety of the bailout. The only problem here is that Bush had no oversight and greed, like water, always seeks the point of least resistance. I think we learned a hard lesson and that the Obama administration is up to the task.
No Jack. The tax is just a way for the Administration and Democrats in Congress to divert attention from the fact that it was them who put language in the stimulus bill guaranteeing the bonuses. They got caught and are now in damage control.
Hi Jack,
agree with your excerpt from your book about Parents, your kids aren't that special!
I really do not fit in any generation! Born in 1965 I am not too sure where do I really fit in with my own life experiences so far since I do not fit the baby boomer profile and do not fit the model of letting kids be a pain in the ass at home or in public! I guess I prefer not to fit..since for me kids are from my own experiences they are not on specials to be passed on to others! They are human beings just like adults are suppose to be human beings where we all need protection, health, education, love and have the right to get a real sentiment that each person is deserving of this love from our own family and from others for us to fully exist in our own lives and in the lives of others!
Taxing their bonus, the one that should never have gotten... is only good when it documents all the Republicans voting for a 90% income tax... when they were outraged that the President wanted to bring back the tax rate to 35% from 30%... and they said it would ruin the ecconomy..... with the GOP jumping on the ship before it sailed.... they voted to tax these people as a punishment to the tune of 90%...
It will prove to be illegal...
If Congress and the lawyers can not find another loophole then go for it.
I for one am mad as hell that we can not even trust the banks anymore.
The question is who can we have trust in and how long will it take the American people to trust again in those who hold our economic well-being in their corporate grubby hands.
Jack: As much as I want to get that bonus money back emotionally, I have to admit that this tactic of using a tax penalty to do so is just plain wrong–and more than likely illegal. Using the tax code to go after a very select group of individuals or companies raises all kinds of ethical questions, and I'm never comfortable with the Congress doing anything ethically.
No it's not a good idea. It shows how the government can be a bully to working man. They need to get the money back within the constitutional law or friendly persuation. You have to remember that a lot of these execs that recieve bonuses are citizens of another country residing over seas. How is Congress going to tax those people over seas? Those execs are going to laugh at Congress. This is nothing more than a coverup for Chris Dodd and Obama's administration's screw up. If they can punish execs using the tax code than they can do it to the middle class. The people need to vote for more qualified politicians and hold them accountable. This whole deal is comedy capers, reminds me of Hogan's heroes.
It is very good idea to tax bonuses because bonuses should be reward for good job and AIG paid them for failure. This is unamerican that our companies reward failure.
Jack – I am upset about the bonuses, the new planes, the contributions politicians are taking from these banks, and the general hysterical hypocrisy of the whole thing.
But that doesn't mean that we can ignore the law and up-end the Constitution to exact our revenge.
The word REFORM means "the improvement or amendment of what is wrong, corrupt, unsatisfactory."
It does not mean to create worse policy to try to cover up bad policy. Mistakes were made, greedy people (lots of them, don't stop with the bankers) did unethical things. But this is ridiculous. It's time to swallow hard, admit mistakes, put reforms into future policies and move on.
For goodness sake Jack, Is anyone in Washington an adult?
Kate
Fairfax, VA
Bonuses are a non-issue. The Neo-cons are laughing at us. Rather than focusing on what needs to be done to return to the regulation in place before the Graham – Leach – Bliley Act (All Republicans), we are focusing on chump change.
We are running out of time. The Nobel Laureates are asking us to look at the big picture and put real money into a recovery package. Making scape goats out of some anti-American Wall Streeters let's the real screw ups and thieves off the hook.
Taxing the AIG bonuses is as constitutionally illegal as was the super-secret Easter Sunday special session Schiavo law.
Taxation may not be used to punish people who have incited public anger against their selves. And in this case, the bonuses are legally if not ethically defensible – not that Congress understands ethics any more than does Wall St.
Hi Jack, the "90%" tax thing was a reaction to the anger of the American people. I doubt the Senate will approve the bill and it will die.
Yes, it was grandstanding, but last I heard we have the freedom to voice our opinion and even...... grandstand.
Still IF you accepted tax payer bail out money ....... you have no right to use this money for bonuses...... and... since when do failing businesses of any kind give bonuses??
No one is more appauld at excess of the financial institutions than myself. Life has taught me there is more dysfunctional behavior than just greed. The other is decisions made out of anger. Or the mob mentality. If the bonus money is legal than we should take responsibility for not fixing it when we could have and move on. Fix it for the future. We should take our medicine. Sometimes the right thing is hard to swallow.
NO! Jack you know how the government is they want stop with wall street they'll tax me too.
Or how about this Arod hit over 300 last year and he had a clus in his contract that he would get a bounus if hit 300 but the Yankees are upset because of the year they had, 1 should Arod be taxed 90% of his bonuses? 2 Or should they take his bounus?
I say no to both questions a contract is a contract unless it a none binding contract like in the NFL.
Sorry for the sport analogy but it's very similar.
The$e after the fact overture$ of "we will fix it" have to end, they $hould have done it properly in the fir$t place. If the American people did their job$ like Congre$$ doe$ there job$, they would not have job$.
Bonuses are already taxed the same as any other income. But, it is dangerous for congress to target any particular group in a moment of anger. Just deny AIG any more money, or at least subtract from their bailout the amount that was given in bonuses.
Jack,
Let the President call some Universities for job paying $250,000 without bonuses and you'll get the best brains not those who feel that they are irreplaceable. How many of the best brains in the Universities across the country earn $250,000 per annul?
Yes, Jack, it is a good idea to tax bonuses; and all other substantial income/profits. I believe in a progressive taX system where those who can afford to pay heavier tax rates, pay not only a greater total number of dollars in taxes but also pay a much heavier tax rate. Our huge national common and public interests, i.e., schools, roads & bridges, national energy grid, conservation and recycling, stewardship of natural resources, climate change, care of the poor, fundamental right to health care for everybody, social security and medicare, public health and food safety, emergency (fire, police and law enforcement, EMT, flooding, tornado, hurricane) response personnel/systems, and a hell of a lot more, must be funded by those who can afford it - not by everybody equally. Obviously, if smaller economies and nations in this world can afford to care for their citizens, the "greatest economic power" in the world can afford to do the same: except for the greed. Our government must create the equity and level playing field in which we all exist, comfortably and safely, together.
Bob White, Hays KS
Word the title right...tax unfair bonuses when the company involves OUR money. It has nothing to do with private companies who know how to run a business without tax dollars. But to hear the media tell it, you all try to make it sound like it's ALL businesses. This is a unique situation and MOST of us understand that. Only the media is trying to hype the public to keep the story going. Typical.
NO, there should be no taxes taken out of the bonuses, because they should never give them out to these people in the first place,, second how about taxing all lobby money that is given to congress at a 90% rate my be they,[congress] will start doing the people's business, Jack there are a lot of pissed off people out here in the sticks,,.
Absolutely, it's good to tax bonuses
The UAW had to renegotiate their contracts and bonuses, why shouldn't the crooks who helped engineer this financial crisis.
Mr. Macafferty, how about if we pass some legislation that would put public servants when speaking publically under oath. If they lie they commit a felony. Real simple. This way I would have confidence that when a public official was speaking they were telliing the truth and if they didn't they risk a felony indictment.
Thanks, Paul Kellam
I would love for someone to answer this for me, why in the world do these people deserve or get a bonus for failing and why didn't Washington assume this before it happened. should have known it would went this way.
No it isn't Jack, and I don't think the legislation will be carried out because Obama won't sign it into law. It is outrageous and I think that there will be some AIG employees that will return some or all of the money paid to them. Not a lot will, in my view, however, we need to be able to vent our anger and you, Wolf and a few others at CNN allow us to do this. Then we move on. It was being so impotent while Bush was in power that led to the frustrations and backlashes, look a Cheney now, he's trying to rattle a few sabre's with regard to Obama and the Democrats, but people aren't falling for it. We move forward as Obama say's and look forward to a better time
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Bad idea, Jack. As President Obama has said, making a law strictly to punish a small group is never the best solution. I think the threat of lawsuits will get most of the money back, as we taxpayers now own part of the companies. We can certainly stipulate failure to meet expectations or retention as reasons why!
HELL NO ITS NOT A GOOD IDEA! What makes anyone think that the Government will stop only with this TAX?? As I said last week they are only crying about AIG to get US to look away from them and their TRILLIONS OF WASTE!
As long as I am not getting one and do not see myself in the near future getting one, I think they should tax them at 150%.
Too little to late and the Senate will find out if its Legal after Congress broke a sweat at the reaction of the bonuses and just wanted to do ANYTHING whether legal or not to make themselves look good. Shame on them! Jack this country is in a economic 9/11 with millions of jobless Americans, and more jobless Americans to come, we have Americans losing their homes, apartments, no college for the kids, AND all no one in the Congress or Senate seems to care BUT its perfectly OK to bail out these banking, auto industries to the tune of BILLIONS of dollars. Is anyone listening in those 2 houses? What about those hundreds of thousands unemployed Americans that will soon not be among the stats of the unemployed because their benefits will be running soon. If those people at AIG that received $1 MILLION dollars or more in bonuses, should return half of it back to the government as a goodwill gesture!!
Sounds great. Not legal.
Bonuses already have a percentage that it is taxed anyway so, subtract that percent from 90 and that's the percent they need to pay back. I say just take the whole dam thing and be done with it.
If that is the only way to get them back.
I really don't care if Congress has to make an amendment to the Constitution to get this money back. Whatever it takes, IRS, amendment, robbery. It was stolen from us, John Q. Public. AIG could not have paid these employee bonuses without the taxpayers money so those contract should have been renegotiated. Since they weren't we need to negotiate whatever is necessary to get them back. The American people who are earning barely enough to squeak by are tired of the greed.
I do not think it is a good idea. It seems to much like governing "out of anger" as the president says. Congress and Treasury screwed up by letting it get past them; it's too late now to clean up the spilled milk. Let's make sure it does not happen again, shall we?
.Not only is it NOT a good idea, the fact that it was done demonstrates to me how simple minded and childish our Congress is. This tax was done out of anger towards AIG and it is unconstitutional.
Throw the BUMS out of AIG and Congress.
Yes- it's called returning ill-gotten money!
I do not think it is a good idea in general to tax bonuses. But in the case of A.I.G., not only do I think it is a good idea, I think the 90 percent proposal should be increased to 200 percent to reflect their wretched failure.
NO...it was a knee jerk reaction to the anger that all Americans felt toward political cowardice and AIG arrogance and incompetence. What bugs me is when they say they had to pay the bonuses to retain the talent pool. What company wants talent that sends them into bankruptcy. I guess you have to be a politician or on the board of AIG to understand that one.
No, not if they are going to tax my $500 bonus. I work hard for my money. I don't gamble my way up and down Wall St. like they do in their big AIG Casino of Deceptions! I will take my money and RUN.
I think the tax plan was a knee-jerk over-reaction by Congress to the anger of Americans. Apparently they thought we were asleep again. Rather than tax the bonuses I think that making the names and addresses public of those who are keeping the bonuses should be enough.
Jack,
I'm one of those who is outraged about the AIG bonus issue and we the taxpayers should get our money back. However, I don't think taxing it at 90% will pass constitutional muster. Whether it was Senator Dodd or the Treasury Department, that protected these bonuses, the truth is that the language was in the bill to allow it to happen, and, an overwhelming majority of the Congress voted to pass the bill. Me thinks we've been ponzied.
Robert
North Port, FL
These bonuses are taxed to death already, let alone using the communist take it all mentality. We are cutting off our nose to spite our face!
Jeff Crocket
New Britain, Ct
No! tinkering with the tax code is Awful.
The set the marginal tax rate for incomes over a million dollars or so at a reasonable level for all. Under Republican president General Eisenhower the rate was 90% and our economy grew and we had peace too. It can be done.
Pay our way, reduce deficits and have a fair tax system, wow!
Jack,
As much as it disgusts me about the bonuses these fat cats get, I think passing tax laws this way is an abuse of power. Yes it was wrong of them to give those bonuses. But if the government just get's all emotional and pass tax laws what's to stop them in other areas that might do more harm than good.
Hi Jack,
You bet it is a good idea. They don't deserve a bonus for ruining the economy. Let them leave their jobs if they don't agree. Where (in this economy) will they go. I'll bet they hang onto their jobs rather than go on unemployment.
If the government can target rich CEOs, they can target you. I hate the bonuses, but creating special taxes to target groups you don't like is a bad idea.
Cartersville Ga.
These are strange times and circumstances. We should probably look this over carefully before doing anything. We do not want to go into a huge peepeeing contest with the Rep.Rights. Let it go and pass on and ahead of it. Just dont do it again!! No more money for AIG untill the rules are clearly stated concerning bonuses and any future spending of our money.
I think the horse is out of the barn, and using the tax code to punish certain individuals is dangerous and probably unconstitutional. Why not just tell them if they don't give it back, they'll be sent to Guantanamo? Oh, that's right, we're closing that place, lol.
When companies give federal bailout monies for bonuses....YES it is a good idea to tax those bonuses. The whole point of giving the federal bailout is that these companies did NOT do well in this economy and now need money.....why should we give bonuses for that? The only place there should be outrageous bonuses for little performance...is in SPORTS!!
Certainly it is a good idea to tax undeserved income. However, in its current form, this bill would never pass muster with the courts. Why not just pressure the clowns who took the dough by launching a fraud investigation?
Just normal taxes. based on total income. We need to forget this rage ...What's done is done. Maybe some will return the money.
Let's look to making changes in future incidents possible.
this wall street thing is a culture unto itself. They have ruled our world a long time. Its going to take a lot to dethrone them. lets just get on with the really important stuff.
I just ask that everyone look in the mirror before you grab a pitchfork and a torch over these bonuses. Once you give the Government an inch they will take a mile and that mile may include your lifestyle.
They may very well enact an "OVER" consumption tax and make it retroactive to our big screen tv"s and granite counter top purchases.
We all rode this gravy train and most of us stayed on til the last stop. Like it or not this country was built on, for lack of a better word, GREED! And in the end it will be some form of greed that pulls us out of this mess. If there is nothing to gain why take the gamble?
Maybe, just like our Grandparents we will learn from this and not bet the house next time...
People getting those two hundred and fifty thousand and above welfare checks would rather drive over the bodies of us poor; then be commanded to pay taxes. I would rather see keel hauling, lashes while tied to the mast, breaking up rocks in a labor prison then ONE more wallstreet theif supporting himself or herself by bonsus money.Off with their heads that is stopping enough of this garbage, they are filthy cry babies.
No, I believe the best solution was Congressman Barney Frank's. Since the Federal Reserve's actions made us the largest owner, we should sue the executives in court to recapture those bonuses. Not as the government, but as the largest shareholder, because we are now a party to the contract as such.
Not a good idea. This could open up Pandora's box. What about the average worker that gets an annual bonus (not as large as AIG), is that going to apply to them also. I think the House over reacted. They seem to do things without much thought.
Although I would rather see those who took the bonuses in leg irons and handcuffs being escorted to prison, taxing their ill gotten gains is the next best thing. I realize that technically they broke no laws but their actions and decisions are still criminal and there should be some laws enacted to prevent such things from occurring again.
Are bonuses considered income? If not, why not? Do we pay taxes? Are the taxes called income tax? OK, guess what I'm about to say. We should tax bonuses at 98%, that'll learn them thieves on Wall Street.
Jack,
This is a very BAD precedent. The president has already said he would not support such legislation coming his way.
Why is a bad idea? It make Congress seem inept and small thinking. It also show them for what many of them are, hypocrites.
Let's face it, the amendment to the stimulus act that allowed this was fashioned by Geithner and his team and supported fully by Senator Dodd. It was a good risk management action then and still is.
I know many people are suffering in this economy, but standing down toxic asset books using the smartest (good/bad/ugly) folks (usually the ones who know the most about these extremely complex products) makes sense to retain them.
I say good job. Risk Management is much better than total chaos in that AIG line of business. If all those people left, the risk is multiplied significantly. And to the congress men and women who say, why not, they couldn't get a job anyway, that's bull! These people would get hired up in no time.
It's a little shaky, but a message has to be sent. The days of "heads I win, tales you lose" have got to stop NOW. If these cretins had any integrity, they'd give the money back out of shame. Unfortunately they don't, sooo....
These people shouldn't get one cent of those bonuses after what they did! To make things worse, they aren't even sorry about what they have done. Granted, taxing the bonuses punishes them, but not at the level that they deserve to be punished
it would seem appropriate for those government officials (senators and congressmenn) who received "bonus" payments from any company receiving stimulus, or tarp or any funds outlayed should step up and return them too....No reason for them to vote profits into their own cauffers....BE ACCOUNTABLE FOR YOUR INABILITY TO READ LEGISLATION BEFORE VOTING...
Everyone seems to be concerned about the retroactive aspects of the tax plan for bailed out companies. How about the retroactive price fixing on options. In Free Lunch David Cay Johnston points that executives have routinely been allowed to go back 30 days to retroactively pick the best price they can. Then they sell immediately, at no risk. This is worse than insider trading! When agent Welling tried to expose the practice she was punished, instead of rewarded. Retroactive option pricing is more outrageous than congress trying to get back stolen money from executives.
The public's confidence in private enterprise will not be restored until there is some effective control over the excessive, underserved compensation received by many executives. Tax policy may not be the most useful way to address this, but "interlocking directorates" and the belief that one's top employees are "too big to fail" has led to an imbalance that must be corrected somehow. Over time, increasing shareholder rights may be most effective, but that can change only very slowly.
no. just withhold that much the next time they ask fer money, or add that to what they have to repay the taxpayers., with interest.
No. As President Obama, and many others feel, it is wrong to use taxation punitively. Since I live in the Boston area, I can remember that sort of policy used in our History. Oh Yeah....that's why we are no longer and English Colony.
I believe wholeheartedly this money (and ALL OF IT) must be returned. If these greedy losers can't seem to see they do not deserve a bonus.....take them to court. They would certainly have to use all the money they gained to hire some pretty slippery lawyers to win this one.
I know it was written as a loophole, but it is hard for me to believe there isn't another knothole somewhere which can be used to justify the negation of this stupid paragraph.
Yes, get that money back! The laws are one thing and the Constitution, and we should always respect the Constitution, however, these guys are being wiseguys and making profit from their own mess. It's not only wrong, but they should be held accountable, not paid.
-ChRIZ
You bet!!! How about We the People stop paying are taxes so are money will not get wasted.
Jack, it is not a good idea. I don't understand the uproar the media is making of this. This has been going on for years. What I propose is tax our senators 90% for not doing their jobs.
While I believe the bonuses were absurd, this law is unconsitutional. The Constitution prohibits ex post facto laws. End of discussion.
I just don't understand how a bonus is warranted when you run a compnay into the ground and have to rely on the govenrment for assistance. Under the option where a company has to borrow money from the government, I think that the govenrment should enforce some sort of tax penalty.
This 90% tax on the AIG bonuses is not Constitutional. It is BOTH an ex post facto law and a bill of attainder, which is directly prevented in article one of the Constitution.. We should be looking at the government appointed CEO of AIG and Congress who allowed this to happen, not passing a retroactive tax.
No Jack its a free market!
No I think a fraud case could be put together & freeze the assets until it is solved. They mislead us that they needed a bailout.
From my perspective, these companies sacrificed their right to avoid such strict government oversight when they begged that same government to interfere.
A better idea would be to have and enforce rules that make information available to shareholders make sense. It doesn't now. Enough Americans are stockholders nowadays that we could make a difference. But they hide things like absurd bonuses in smoke and mirrors. Seems like the way it is now, the employees take any gains. The investors take the losses. Surely we would never agree to that if we could tell what they were doing. I don't mind them make a zillion dollars if they earn it. But it has to be linked to performance.
As much as it pains me to say this, no. Our tax system is not a penal system, and should not be viewed/utilized as such. Instead, the government should find a way to recall the bonuses – given that it now virtually owns AIG it should be possible?
While taxing bonuses is a satisfying "eye for an eye", a better approach might be to define under which modality the government is giving these institutions these funds - by taking a capital share and making it a government corporation (like OPIC or FDIC), under a grant arrangement, or under a contract. Each of these modalities already has a large foundation of legal and regulatory controls to protect the taxpayer. Are normal assistance methods being waived in providing this assistance? If so, by whom and why is it so vitally important to give away taxpayer protections - like controls on bonuses and salaries, etc.
I wish they could, but legally it's not going to wash. What would work is to spin these Exec's into a intentionally underfunded company and letting them fight for those bonuses in bankruptcy court. That would be a two-fer. We'd stop all future bonuses and these clowns would get a taste of the misery they've caused, as they stand in the Un-enjoyment Line.
About the tax – No! No! No! I am a Democrat, and I am upset about the bonuses, but allowing the government to arbitrarily tax bonuses because we think they are inequitable but have been part of a contract is absolutely wrong! Jeanne
No... Taxing bonuses from executives working for bailed out firms will incentivize their departure. This is business... Why would someone work for a company receiving bailout funds and take less money. This will inevitably lead to these companies becoming even weaker, which means that taxpayer money will be going to companies that are only getting weaker, and the chance of these companies going bankrupt despite taxpayer funds will only increase. You wanna talk about a waste of money. The government would committing taxpayer dollars to companies that at the same time the government is sabotaging... That sounds like something W would do.
Tough call Jack, it's no secret that the Obama administration deliberately facilitated the paying of bonuses to top executives, I just think they underestimated either the size, the resulting public outrage, or both. For the sake of his approval rating, however, Obama desperately needs to tax these bonuses, and think twice before letting clowns like Dodd open his mouth.
No Jack,
It is not a good idea. Our congressman had the chance to put in legislation fromt he beginning and fail to do so. Now is not the time to "grand-stand" to show the American people how we deal with our mistakes. This country was built on honesty, and being legal. The contracts are proof of how the good ole boys club works. We need to can the practrice, not take away from those who happen to get the best of us this time. The real challenge is MAKING SURE it does not happen again!!!!
How can congress imposed such an incredible tax?! I do not condone the bonuses handed on Wall Street, but if we allow Washington to start imposing such high taxes on these bonuses, where will it stop? Whose to say they won't do the same to the next group of people they get upset with?
Waiters and waitresses are taxed on their tips. Isn't it the same concept? If you went to a diner and were required to leave a 90% tip, you would sure wish for means to get some of that back if you felt that such a high tip was unfair. If not, that must have been some amazing mean and impeccable. Not sure if the same can be said about the service AIG has rendered to the financial system.
YES, tax the CRAP out of them...
Like it or not the bonuses cannot be legally taxed at 90%. This amounts to confiscatory practices by the government. Our constitution does not allow for this kind of behavior. If the government confiscates it must compensate. This language was written into our constitution to eliminate the practices imposed on the colonies by Britain. If this is allowed to happen then we might as well use the constitution as toilet paper.
Wolf is right regarding the bonuses already being taxed as income. However, if the UAW had to back off their contracts to "save the car companies", any contract can be broken.
At Sprint, I didn't get a bonus unless the company was doing well and my performance review showed excellence. What excellence is there when AIG needs to beg for money from we taxpayers? If AIG bonus recipients won't relinquish their bonuses, AIG needs to give that much money–as well as the money spent for post-bailout influx parties–back to the government. I'm not getting a bonus now! I was laid off!
Jack i have work in marketing in Corporate America for years. We get bonuses based on individual performance Not Overall corporation performance. The Gov't was right to pass the bill to allow legal contracted pay. Now its taxation with American representation. Can you say gangsta gangsta, Jack?!
I hate seeing them get those bonuses...but if this law were to pass it would set a frightening precedence where the all-powerful government can pass laws retroactively aimed to punish particular persons or categories of persons. Nope, this scares me. There must be a better way. Perhaps they'll get what is due in their after-life!
It is a slippery slope when politians start placing high taxes on individual citizens, especially when they are only doing it to cover for the fact that they voted for a bill without reading it which allowed companies like AIG to give the bonuses in the first place. I would love it if they could get the money back but think we would all be better off if they did not use taxes to punish people and just quit giving these companies "borrowed" money.
Julie
Austin, TX
President Obama as a lawyer understands the legal implications of making arbitrary laws like the one Congress made. We could recover these bonuses in a more effective way – Nullify these contracts legally in a retroactive way. Then there will be no legal reason to pay or keep these bonuses the bonuses.
No Jack, it's a lousy idea. Using tax code as a weapon is anti-American and anti-Democratic. It's simply targeting people because they are unpopular. Worse yet, this is a retro-active tax. Do we really want to levy taxes retro-actively? That's a pretty sorry way to do business. The precedent this sets promotes an horrendous abuse of governmental power.
Jack,
I keep hearing about bonuses being about Wall Street tradition and that someone like me (20 yr old college student) doesn't understand the degree to which these bonuses play in these corporations. But what I do understand, Jack, is that bonuses are traditionally given based on performance. And the fact is, if we hadn't bailed them out, they would be under and there would be no bonuses to give. Tax the hell out of them I say. But perhaps, they should receive a tax break for hiring new accountants...
Why tax them, just take them back, you can rework contracts. Or ask for them back and if they refuse let them keep the bonuses and make their names public, see if they're woo brazen then...
Heavily taxing the superfluous bonuses at AIG is a bad idea. Governing and enacting laws that will prevent this in the future is necessary. In addition, holding these execs accountable is paramount. Our CEO was rewarded 39 million as a bonus for stealing 42% of my pay and robbing my pension. This executive theft MUST stop. A once proud pilot at UAL. Ron
Why not? They get to keep 10% of it for doing a bad job...
It angers me just as much to pay those clowns on the Hill a salary to waste my money and mismanage everything they touch. I have no problem with taxing the bonuses on Wall Street at 90% if you are going to tax the members of Congress at 90%. How about if we tax members of the media 90% on their salary everytime we feel the do a bad job or print an incorrect story. Wait a minute, I think that person that waited on me at Starbucks did not give me what I ordered, lets tax her too.
If we are going to start taxing everyone that makes us angry we can pay off the deficit in no time.
NO! It's unconstitutional and it's wrong. If Congress can target a few now, who will be next, maybe you Jack?? Yes, AIG was wrong and the government didn't stop it but to punish through the tax system is scary bad. Will someone please send a copy of the Bill of Rights to Congress. Congress is just reacting through fear of losing their own hides!
Loretta from MD
The Congress can't impose on someobe's past act, and they also can't issue a bill of attainder. I suspect that their "bonus tax" falls on one of these two laws.
None of the confiscatory tax proposals will pass Constitutional muster. It says "Congress shall make no ex post facto law." It also says "No Bills of Retainder." These tax proposals will fail upon appeal.
Barney Frank's proposal is cleaner legally and faster. We, the taxpayers own 80% of AIG and so the government can take control of AIG as a matter of shareholder equity.
/Dick Jones
New York City
They fooled the regulators, they deserve their bonuses. Just give it to them in current market value AIG stock. We taxpayers have plenty that to give them.
Taxing the bonuses is NOT a good idea. A contract is a contract whether right or not. Too many Americans today are complaining about "big brother" being too invasive already. Imagine the turmoil that would be caused by a 90% tax on a bonus just because the government did not think you deserved it.
I think it's a horrible idea to enact high tax rates as a punitive measure for any reason. The last thing we need to do in this country is transform the IRS into the Gestapo. It might be better to pass a law requiring the AIG bonuses to be returned and deposited into a government held escrow account where the funds remain until all the bailout money is paid back.
The Government should not tax the bonuses of AIG executives; instead the executives that played a part in crisis should be faced with a choice to either donate their bonus to a family ruined because of the company, or the bonus should go to pay off AIG's debt to us the tax payers. As for the executives that are not responsible for the crisis their bonus should be delayed until a later date after the majority of tax payers money has be returned.
I see no reason why a 98% tax on bonuses paid by institutions that received bailout money should not be passed. The law could specify that it applies only to bonuses paid under those circumstances. Meanwhile a law could certainly be passed that would put tight restrictions on all institutions receiving baliout money since that first group and in the future, making bonuses illegal until such time as the money is paid back.
It would be a lot easier to just publish the names, addresses and amounts of the people who took and have not yet returned said bonuses. Let their neighbors convince them that returning the money is the right thing to do. If their neighbors aren't convincing enough, I'm sure we can find some people to deliver the message. Kind of like Christmas Caroling except without singing and with weapons.
When congress changes the bonus/compensation structure for bailed out companies, maybe they can include a law that limits lobbyist contributions to congress to $250 per person. You know. like most non-Wall Street corporations.
Jack;
No. Changing the rules after the fact is not constitutional in any form of this countrys contract laws.
This problem should have/ could have been addressed prior to the distribution of TARP and other bail-out moneys. It's too bad, that most of our law-makers, didn't take the time to read the Bill. Dodds, in fact, DID attempt to introduce legislation into the recent compact, but was strong-armed by Geithner and his "Wall Street" companions.
It is not a good idea jack. Even though this situation is unfair, it really doesn't get the the important issue. THEY SHOULDN'T HAVE GOTTEN A BAILOUT IN THE FIRST PLACE. Of course if any business gets free money to do what they want with without any strings attatched, they act irresponsibly. If they wouldn't have gotten bailed out, they probably would have been a little more tight with there money in the first place. The government is promoting bad behavior by rewarding the slimeballs that caused the problem. If you want to get mad about something Congress, Bernanke, Palson, and Geitner are the real culprits.
AIG is not the only company affected by this wrong-headed act that the House passed. Several of the banks that have accepted TARP money did so at the request of the Treasury Department so there would be no stigma attached to taking the funds. These banks didn't want the bailout money and didn't need it. Now four months later, another branch of the goverment is smacking them down for it. By the way, these companies are running profits – making money on the taxpayers' investment. Please get all of the facts out there and stop calling it "a tax on AIG bonuses". This law would cost our country hundreds of thousands of jobs if the banks feel the need to hurriedly return their TARP funds.
The way I see things, if the majority of people want that money (the money that we gave them out of our pocket) taxed back, it is the duty of the government (who are supposed to represent our opinions) to get that money back. It's our money, not theirs.
No I don't believe using taxes to punish these abusers. It is setting a bad precedence. We are in new times and need new rules. When a company is bailed out then any benefit contracts need to be scrutinized.
It sounds like the tax option is not legal and will never work. As the owners of AIG we should fire these people and make it clear that whoever hires them will be carefully scrutinized by the SEC etc. so that they will not be able to pull this nonsense again. This should basically blacklist them in the financial industry and they'll find out how it is to live in the real America.
No. It is not Constitutional. I've worked for 39 years at minimum wage and less. 22 of those consecutive to now at less than minimum wage (like $.50/hr.). I've NEVER received a bonus. 'THAT' is American appreciation. And seein's how bonuses are usually doled out at Christmas time: "No thanks, big boss man. YOU are not Christmas. And you can't make me say that you are. In fact, what you are is business priming the Christians at the end of the year to give up their money as your own coda."
Andre R. Newcomb of Sierra Vista, Arizona
It's not a good idea to "tax out of anger." It's not constitutional. I myself am not a big earner. I am even unemployed at the moment. I am against, and even angered, at what these executives did. I even have stock in AIG.
Yes, what AIM is wrong, but there are other methods to "get our money back." That is what we want. That is what we should aim for. There is already an income tax, use it. There are surely other methods besides a random tax pulled out of nowhere. This sets a unique precedent that would be bad for the United States. Congress should use their minds and use their creativity for an answer.
We should be putting back money in the taxpayer's pocket, which the government has already tapped for AIG and other companies.
Congress needs to stop pandering; they could learn something about truth telling from the President. A 90% targeted tax might be on Wall Street now but who will be the next target; those who vote against their party? I am as angry as anyone about the bonuses but this tax is not the solution; find another way and do not undo the American system
PS. in my days of tough work, we talked about the need for MASH humor; anybody remember MASH
As infuriating and repugnant as those bonuses are, it is unconstitutional to use the tax system in a punitive manner and that is a door we surely don't want to open.
While I am as upset as the next person about the irresponsible AIG bonuses, targeting individuals with a retroactive tax is a dangerous precedent. We may all be unhappy with AIG now, but what happens when Congress decides to target some other group they are unhappy with? Fortunately, there are protections in the Constitution to prevent this sort of targeted legislation that we can't just simply ignore. This isn't the Bush administration anymore.
Absolutely not ! The hypocrits in congress knew about the bonuses and approved them. No going back now – it's unconstitutional.
How about Obama, Dodd, Frank, McCain and all other AIG recepients giving their campaign contributions to Treasury?
Jack,
The question isn't should be or should we not tax bonusess. The question is should the bonusess that was given to AIG Execs be taxed? My answer to that? No!
Ethically it is not fair to change the rules of the game after the fact. Am I happy about the bonusess? No. But fair is fair. That is why we make contracts and we should honor them – even when they turn around and bite us in the but.
No on taxing bonuses. I am not receiving one. My point is that Congress is the problem. They along with Executive Branch set up all of the foundations for our current crisis. They forced banks to make inappropriate loans and covered the backside risks with Fannie Mae and Freddie Mac to accept the rubbish loans. If we 90% tax AIG then 90% tax the 300-700 thousand Fannie and Freddie retention bonuses that are going out from tax payer coffers right now to " executives" at Fannie and Freddie. Personally I say no more propping up these loosing institutions and let the free market clear out these rotten businesses.
The Republicans have it right! Require hourly union members to take cuts in salary in order to get government help and allow the gazillionaires on Wall Street to get bonuses from the American people for bringing us to the neo-Depression. Enough talk of wealth redistribution; It is appropriate for the rich to take more from the greedy masses. Let the people eat cake.
Jack: Taxing bonuses is appropriate, so long as it is consistent with current tax laws. To impose, retroactively, a tax on bonuses of the magnitude that the House adopted last week, simply demonstrates the total inability of our elected representatives to act in a manner that is within the law. This behavior is equivalent of vigilante justice, which we long ago determined would not be tolerated. Rex from Sheridan.
While I feel the AIG bonuses were immoral and unethical, President Obama is correct in his assessment of the legality of the House bill because you cannot change law after the fact. If the UAW was forced to re-negotiate their binding union contracts BEFORE bailout monies were given to the auto industry, then why is AIG taking the position that their contracts were non-negotiable. I believe that the AIG corporate executives did not, and do not, want to sacrifice anything, especially their lavish lifestyles. Bottom line, they love money more than country.
Yes they should be! Its are money anyway, its time to take it back. Jack I wish I could get paid 50 thousand for bankrupting a company. Let alone multi million dollar bonuses.
Andrew Brakey
Frederick, MD
I think that they should be taxed. I also think that within the bailout paid to AIG, there should be explicit notation outlining the way bonuses should be handled (in my opinion they should be completely done away with until the government bailout has been paid back in full). Its very frustrating seeing these things happening, and its even more irritating to know that those who wrote the outline for the bailout DIDN'T do anything to prevent this from happening.
Yes, taxing THESE PARTICULAR bonuses is a good idea. First of all, bonuses are usually performance based, and AIG DID NOT PERFORM. Secondly, this is MY TAX MONEY. This bail out is just that... a BAIL OUT, in order, supposedly , to keep the company afloat. Surely that would mean they need all the bail out money to do just that. To the best of my knowledge, no one asked me if it was ok to use my tax money to give million dollar bonuses to execs who drove the company into the ground. They can all just live on their million dollar base salaries, and suck in their belts, like the rest of the country....and be thankful they have million dollar salaries. Lots of people don't.........BELIEVE IT.........OR NOT........
A 90% retroactive tax on bonuses, born of valid anger over continued raping and pillaging by wealthy execs, is unConstitutional and therefore wrong. We've had more than enough shredding of the Constitution by the last administration, and more than enough of Congress overstepping their authority (remember the Terry Schiavo bill, butting in where they had no business). Bad enough when the Supreme Court does it (appointing a President for instance). THIS Administration has promised BETTER! His Democratic Congress needs to get the memo! I'm mad as hell but I want the rule of law to work for a change, whatever the cost.
It is a terrible idea because it is unconstitutional, amounting to an ex post facto law or bill of attainder and violates the equal protection and due process clauses. The people who will really get hurt are not the ones who are empowered to make decisions about the salary, bonuses or employment and the people at the top are so rich that taxing them will not hurt them. We have legal remedies in place that the government can use to redress the wrongs by AIG. A knee jerk reaction to apply their wrongs to an entire industry is not only wrong but will set a dangerous precedent. Weren't we the ones who rebelled against taxation without representation?
Retroactive, group specific taxation; lovely. Where the Hell was congress 6 months ago before any payouts on these bailouts? That was the time to change these contracts, and congress did Nothing!
Heck no! If we don't smack this down we ay okay congress ultimate freedom to do what they want
Jack, I don't think it goes far enough. I think we should tax the juiced up baseball players who don't bat 300, quarterbacks who throw more interceptions than touchdowns, TV stock pitchhmen who tout losing stocks, weathermen who should have windows in their studios and last , but not least, legislators who promise that they will solve all the problems in the world and when they don't deliver blame everything on the other party.
It is a great idea to tax those AIG bonuses in my opinion. Any law suit to try and recover that AIG bonus money will be time consuming and there will be no guarantee of winning. Legislation to deal with future bonus money will not recover the unjustified bonuses that AIG got which I helped pay for. Taxing those bonuses will get most of that money back right now and it will send AIG and other bailout recepients the message that they need to hear.
It's a fantastic idea, but as are most fantastic ideas, it's illegal. Of course that never stopped the previous administration but nothing seemed to stop them, including Congress. As for those bonuses, just deduct it from the next payment. If AGI wants that 165 million back, let them go after it. It’s their problem, not ours. Now close those loopholes and restrict what it can and can’t be used for.
Not yes, but hell yes. It's BONUSES, not their normal wages. We are also not talking about people making $10/hour and getting bonuses. We are not even talking about people getting $100/hour and getting bonuses. What happened to all the outrage over an inaccurate $70/hour that union workers were supposedly getting paid? So let's call it what it is: bonuses for people with normal salaries well beyond $100/hour, bonuses way beyond their normal pay. With JPMorgan about to take over the "bonus" headlines, it's obvious Wall Street is unable to deal with austerity on its own: They have entitlement on the brain.
Jack, you are asking the wrong question. Do we want the federal government to start passing laws that retroactively cancel contracts, however onerous? When would it stop? The government subsidizes so much of public life that this could become an excuse to micromanage private agreements. I hope CNN doesn't have any agreements with the feds. They might ry to cancel your contract, Jack. That would not be a good thing.
Once AIG pays off the Government AIG can pay off the bonuses to the employees who created this mess and supposedly millions paid to the Board of Directors. This is the example set by J. P. Morgan and their corporate aircraft. I’ll have to admit one person said this on CNBC. I would eveny allow those who have quit and still receive their bonuses to return and ease their conscience by helping to solve the company's problems.
Cordially yours,
Kelley R Benningfield
The money we as tax payer gave to AIG is to save the company and help stablize the economy not to reward the failure staff memebers. This is pretty much stealing from all the American tax payers to reward those people who were apart of the economical meltdown. I would rather gave my tax money to someone who actually need help in these hard times.
You bet . No one deserves that kind of money. And especially our money. If they want it so bad then let them pay for it. It's like everyt;hing else in this country. The more you pay for something the better it is. Well this should be a learning experience for all of us. If these people were so good how come we are where we are.
Jack
It's a great idea, but the question should be is it constitutional and I believe the answer to that is NO.
I think we should go back to the taxes rates in the Nixon or Eisenhower years: 50%, 70%, even as high as 90% for these mega compensations. Those were the years when the Rich were Rich but the middle class was a real middle class.
Big Bonuses (paid to brilliant people for their brilliance)...Hmmm...let's see...these guys drove
the economy into oblivion ...took almost everybody with
them and they are getting
big bonuses.......I think we're on to something
Jack. Meet me at AIG after work. I mean, if that's
the level of competence you have to have, we can
downgrade and get a job with AIG...but we need
more insentive...how about we try to out "incompetent"
each other and the winner get s a bigger bonus.
On second thought...ah forget it Jack we're just not in their league.
By bailingout AIG instead of allowing it to fail, Congress allowed for business as usual. Congress gave them the bailout with very little restrictions, now everyone on the Hill is crying foul and outrage. Fact is the bonuses were already contracted. Fact is Congress should have known and made provisions in the Bill to stop the bonuses. Fact is- they didn't! What's the point of calling foul now?
Taxing the bonuses at 90% works for me if there is no better and faster way to recover the money for taxpayers. However, this office of AIG was in London. Are all 73 bonus recepients even American taxpayers, or will some of them be foreign nationals who are not subject to American income tax laws? If we knew who they are, we could confirm whether they are American taxpayers, right?
The bottom line is as President Obama has said repeatedly, it is outrageous to pay the bonuses under these circumstances. I only wonder why he has not done something to hold his treasury department officials accountable for pressuring Senator Dodd to make it happen in the first place. After all his talk about transparency and accountability, his actions in this instance contradict his promises. Empty rhetoric about how outrageous it is, with no actions to recover the money and find out who is responsible an hold them accountable is just as outrageous. President Obama should investigate and fire some people over this. Just promising again to prevent it in the future is absolutely too little too late.
He talks good, but actions are what we need, not words. Wow, I sound like Hilary during the campaign!
I think the bonus are terrible, but that was 2008, but nobody has ask this question: are these bonuses are active for 2009, or are we going to go though this again. All business that recieved any gov assistance should answer this question. If they take gov money no bonuses should be issued until the people get paid first,
Taxing AIG bonuses after the contract is made is unconstatutional so of coarse it's not a good idea. The congress, who OK'ed the bonuses, is just setting up a smoke screen to make every one think they are on the side of the public. They no their new tax law won't fly.
Robert.
It's kind of like this,Jack. The government cannot go back and collect a higher tax than the original. It would set a dangerous precedent. Aig apparently has its hands in every business in the world. So time to bite the bullet and stop worrying about things that we really don't know that much about. Thanks Jack for the Cafferty File. Situation Room just isn't the same when you're not on.
I'm fortunate enough to be working for a company where sales and profits are up. (nearly 10% over last year) After a year of extremely hard work no sick days and limited vacation time my wife and I are anxiously expecting my annual bonus check for a wopping $2400.00
I'll make a deal with the executives from AIG. I'll give back 90% of my bonus if they give back 100% of theirs.
I am sick of these bonuses.It doesn't make sense.Why do they get bonuses in the first place?If they're working hard making money for the company they are working for , what about us?Aren't we working hard too, How come hardworking americans don't get bonuses.Should we all be CEOs. I am pro Bonuses taxes.
Here we go. 76% of us want the tax on these bonus monies to be enacted. But all of a sudden the President and a few other bleeding hearts thinks this is wrong? So, we are going to give these idiots who created this mess a "free ride" because the President won't listen and do what the majority of us want? If we don't do this, it will certainly be sending the message to those jokers that they can just continue to do what they want, the government has no backbone to punish them. Punishment is what they deserve, and what will really get their attention is when they realize that they will suffer repercussions for their actions.
Yes! they should pay 90% taxes. First of all they got bonuses it is not fair – there are nurses,paramedics and doctors, who work much harder than these people – how come they all don't get some extra money for their hard work? These people don't do anything – they put their company in debt – they got money from our tax money to come out from the debt – how can they get money? and if they get bonuses they should pay much higer taxes.
I think its awesome that their taxing their bonuses. They should not be worried about being selfish and their precious bonuses! They should be more concerned about paying back the money we [the tax payers] sadly allowed them to borrow and be a responsible company to pay it back to it's right full owner! Then they should learn to run a company properly with honesty so they do not end up in this mess again.
Yes, I think the tax is a great idea. And it has nothing to do with governing out of anger. It has everything to do with governing out of trust. By the way, trying to correct the situation by shaming the greedy does not work. The greedy has no shame.
Taxing the bonuses already paid to AIG is probably illegal.
However, putting a limit on future bonus monies for firms receiving bail out assistance is justifiably necessary. I am in accord with one of the speakers on one of cnn's earlier shows today, that the financial
crisis we're facing today was based on greed. Greed being #3 of the 7 deadly sins.
I think that taxing these bonuses after the fact would set a dangerous precedent. Congress could decide to tax anyone anything they want...at anytime. The Congress is just all nervous now about their own re-election chances. They know the public is outraged, and they are the ones that passed a bill, without reading it, to allow these bonuses in the first place! Just reducing AIG's next bailout does nothing, these bonuses were paid with taxpayer dollars no matter how you slice it. The time to do something about theses bonuses was before they went out. The Obama administration admits to intervening and adding a loophole to allow these bonuses. Obama is willing to take responsibility, and if the American people want to call him on it, they can do so in the 2012 election.
I want the money back too, but I want it done legally! Spitzer had a great suggestion on the GPS interview on Sunday. The Gov't should take AIG & the bonus recipiants to court. There are law that prevent s unreasonable taking and the fact that the bonuses couldn't have been paid without the infusion of taxpayer money!" Let's do it, but lets do it right! After all, we're NOT Republicans!!!!
There should definetly be a bonus tax, if they can afford such a substanial reward for services not rendered effectively, then maybe instead of bailouts, they should be required to utilize the american process called bankruptcy, like the rest of americans. Furthermore, we are still waiting for Obama to rid us of these old ways of doing things as he keeps on and on and on promising, still looks like the same old... THANKS
The outrage over the bonuses paid to AGI employees is misguided. They were doing the job they were given – to maximize short term profits in order to drive up the stock price. If any of them had taken a longer term view and acted differently, they would have been fired for not doing their job. They were not the problem. The system is the problem.
Ray
Truckee, CA
There are two options,tax them or retrieve them in full.Ideally,they should not have been paid in the first place.
Jack, what ever is good for us is one thing,but the leaders act like they know,but from where i am sitting,I see our leaders are running into each other just as confused as we are.Only one other thing the news media are putting so much spin on the issues which add fuel to the fire. With this I am not sure.This is not an eassy yes or no question!!! All of us are in a place we are not too sure.
Let everyone governing out of Washington take a salary of zero until the 165 million is paid back to the tax layers. They let the door open which allowed those morally corrupted AIG employees take bonuses for doing nothing right, all the while hard working American families are losing their homes, jobs and dignity.
They need to be tax 99.9% and then I'm satisfied.
No, if we taxed those for not performing... wouldn't we (taxpayers) be entitled to a refund from teachers that "passed" students that could not read when they graduated ?? Did the teachers steal taxpayers money ??
Jack,
Congress's out rage over the AIG bonuses takes the "tax payer's spot light" off the recent Congressional junket to Italy. That million could be used to repair the school in South Carolina, recently spotlighted on CNN.
They need to get a real job!
Jack if you were to cost your company billions of dollars would you be getting a bonus, not on your life, you would a boot alright, out the damn door as you headed to the unemployment line.
Well, Congress was clearly overreacting to the anger we, the People were exhibiting after AIG paid out $33.6 million in bonuses.
Yes, they had contracts, but the contracts should have been voided when AIG FAILED.
Had the U.S. government not bailed out AIG.......... AIG would have been dead.........gone..... kaput! And then AIG would not have been able to pay the bonuses!
Bonuses should be given for brilliance and SUCCESS not for retaining the IDIOTS that got AIG in trouble in the first place!
A knee jerk special tax on a select segment of the population is not good, it's scary. Maybe congress decides tomorrow we all need a sudden extra tax. The economic recovery tax, you have a job send the government 90%.
Shall we assess special taxes based on Race, Religion, Ethnic heritage as well? Where will it stop.
The tax code is already too convoluted without a wildcard tax option.
Waiters and bar tenders have to pay taxes on their tips! Why shouldn't executives have to pay taxes on their bonuses?!
No. Conveyance laws are sufficient to stop it.
It may be a good idea to tax the bonuses, given the revenge factor most people feel, but it won't happen. What should happen is these idiot executives and the board of directors have their names put on a no hire list, because they will just go to some other Company once the dust has settled . Sure the no hire list is illegal, but it happens all the time.
Re- AIG Bonuses: I can't beleive that someone can get a bonus for driving a company bankrupt! They say that they deserved the bonuses, because it was in their contract. Didn't the auto workers have a contract? The government made them give up wages and other consessions, in order to get bail-out money. Blame the workers. Why didn't the bank tellers have to take wage cuts, to bail-out the banks? Nobody blamed the workers at the banks.
Hi Jack, How can something that is already bankrupt go bankrupt?
First, I am not sure that tax adjustments not due and payable until April 15, 2010 are unconstitutional. Otherwise, many tax rates and other "stimulus" plans, which are changed at the last minute would have been unconstitutional also. The real issue on these "bonuses" is that it seems to indicate that President Obama clearly knew in advance and allowed them to go through anyway. I just cannot believe that this was not approved at the highest levels. To then feign, anger and ignorance, is extremely disturbing to me. I had high hopes for Obama, but I think he is also out of touch with how many people are really suffering and will continue to suffer for some time. The only thing really "transparent" these days is that Obama is as the Reverend Wright once stated, "oh, he is just doing his political thing", that is taking care of the rich and powerful. I am disgusted in this entire process, it is filled with corruption and waste and will just impoverish our children and grandchildren, and quite a few of us seniors too. PS. I am white, voted for Obama, and contributed more than I could afford.
I think the allowance of these bonuses, which Dodd was aware of, was the first mistake. AIG does not have any money any more. They went essentially out of business so that should have voided any and all contracts. When they received bailout money, they were no longer on their own, so why were they allowed from the beginning to keep any money?
Tax them? You betcha (head tilt, wink), and tax them good! I am sickened by all the people who have done such shameful and harmful things in the name of greed, and no one is going to jail, or paying for it in any way except for the innocent public.
Are there non-ex-post-facto tax bills? I thought all newly passed tax bills were retroactive to the first of the year. So maybe our tax system is broken and we should do away with it? It's not like there's anything our society wants to pay for. Besides, we can always ask for patronage from the rich. Other societies and other times have done that. Let's just go back to that.
Are you kidding me Jack? We do not haved 9yrs to wait to see if we go bankupt, and futhermore reguadless of what the republicans say and the CBO says, 9yrs is a long way off , and who can predict what will happen, and how do we "really" know that we will be broke? The CBO sounds like they are siding with the republicans redoric. Something has to be done now, at least this is a start, and god knows we need to start somewhere!
I am really tired of all the naysayers out there, first they complained Geither did not do enough, and had no plan, now he has a plan, and the naysayers are still not happy! ENOUGH IS ENOUGH with all the naysayers out there. We need action now, and not to worry about 9yrs from now, we can work on that later, we need a plan now!
The Obama administration is dammed if they do and dammed if they don't. Kudo's to Obama and his administration for trying to tackle this very very difficult time we are in. At least he is not Bush, who did NOTHING for the american people, but start an unjust war, and bankrupt this country in the 8yrs he was in office, he fell asleep at the wheel, and and left us all holding the bag!! And the republicans who are complaining today, are the same ones who were under the Bush admin, and they too are guilty for doing nothing in 8yrs, so they have "NO" place to throw stones. The republicans need to get off their high horses and support our president, and stop being the party of "NO"
Brenda
Schaumburg, IL
Jack – I have a question for you. Why are these bonus contracts so sacred? Union contracts are not. Let them take to the courts. If it is because it is too expensive to go to court than it is too expensive to take petty criminals to court. Like the Quicky Mart robberies and shoplifting and speeding. Deregulate it and don't bother. It is way to expensive to take it to court for 100 dollars. The millions and billions that are taken from us are petty – well than these are way to petty. Right? Just tell me what in the heavens name are you people thinking? It is ok for them to extort the American taxpayers many who are being laid off and have nothing??? Who side are you on? Why did the federal Reserve put the bonuses back in. You are a reporter =- find out.