Good afternoon Southeast Texas, we come to you in an indecisive state. For what seems like all day, we've been sitting here like Dr. Jekyll and Mr. Hyde trying to figure out where we come down on this whole A.I.G. Bonus-gate debacle.
This morning, on our behalf, the U.S. House of Representatives voted 328-93 to tax 90% of the $165 million in taxpayer/bailout-funded bonuses A.I.G. doled out to executives.
You might think that would make it easy to form an opinion, but it didn't. Let's all take a moment to analyze this situation together:
On one hand...that's a lot of bonus money for those who led a company to the brink of bankruptcy and had to approach the U.S. government with their outstretched (perfectly manicured) hands and ask for $182 billion.
(The billion is highlighted because it's a word we're seeing so much of these days, we've actually become desensitized to how big it is. Be honest...does it even phase you when you read it in the news any more? This is a problem.)
On the other...the government neglected to read the fine print of its take-over contract (TARP) that said all pre-existing bonuses would be paid out once A.I.G. execs got their hands on said $182 billion.
BUT...the government now owns 80% of A.I.G., so it should be able to change things in the contract it doesn't like, right?
HOWEVER...a contract is a legally binding agreement, thus it cannot be changed.
Can you see how this is wicked confusing? Because the government now owns most of A.I.G., the House of Representatives is acting like a human resource department and changing office policy because they were too short-sighted to see this coming. (Up next will be the Senate debating the pro's and con's of the new coffee maker in the A.I.G. break room.)
Our brains hurt now. Both of them.
Where do you come down on all of this? Let us know in the Comments section.
Thursday, March 19, 2009
Should the Government really tax AIG...even though it should?
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8 comments:
Unfortunately, this bill is not directed only to greedy corporate execs at AIG who paid themselves millions of dollars for making poor executive decisions. Whether the government goofed and neglected to pay attention to the fine print or not, I think most Americans agree that it is just plain wrong for top executives at AIG to earn millions of dollars for being stupid and irresponsible.
However, this bill is directed at every financial institution which excepted TARP money (of at least $5 billion - Citigroup, BofA, JPMorgan, Wells, etc etc etc etc). It also states that the bonus of any employee whose family income is over $250,000 will be taxed at 90%. Really? So please correct me if I am wrong, but it sounds like the government is taxing the hell out of a lot of hard working employees. While the greedy corporate execs make out with 500,000 instead of $5 million in bonus money - how many more employees who actually did their jobs well and worked their butts off are getting paid a $10,000 bonus instead of $100,000? Or $1,000 instead of $10,000?
And what exactly does the government plan to do with this taxpayer money? Fund special interests who are paying them millions of dollars and lining their greedy and corrupt pockets?
RE: Felicia
I think it's interesting that you paint a picture of those who make a salary in the $250,000-ish range as a suffering lot.
It's a tough sell, in this economic climate, to make it seem like anyone who receives a bonus at all is suffering, let alone someone who's receiving it on top of that large a salary.
They may be getting the short end of the stick, but it's a pretty nice stick to begin with.
Yes, they're all taking a hit and, yes, it's not what they expected to receive, and that's disappointing to anyone. But they're still much better off than most people.
As far as what the Gov't will do with the money...I share some of your skepticism. Hopefully it won't be recycled into another poorly constructed bailout deal, and will be put into other much needed programs.
The people making these salaries work 80-120 hours a week and invest a large part of their life to make the companies they work for MILLIONS of dollars. They work to be the top of their class at school and work their pants off being extremely productive so that they can enjoy the fruit of their labor. How long with this 90% tax rate apply? And how about all the corrupt lawmakers who took millions of dollars from Fannie and Freddie. Lets tax the hell out of them too. They have a lot more to do with the current economic crisis than most of the people who will be paying this 90% tax.
Shall I remind miss Felicia that not everyone making 250,000+ a year works 80-120 hours a week, and there are a good number of people out there that work 80+ hours a week for 1/5 that salary, if they are lucky. This is not a matter of how hard people work, it's a matter of the financial sector and executive management teams becoming so greedy and entitled, they've convinced themselves they are worth massive amounts of money. In actuality, none of them made “millions” for a company all on their own. It takes a village, not a king and his court, to make an enterprise successful. In the end, I think it’s about making those accountable, who were so short-sighted about profit in year A, they ignored the cost of that profit for years B, C, D, etc… I think it is poetic justice what the government is doing, because they found a loop-hole. While bonus based contracts are being honored, and checks are being cut, legally the government is snatching that money right back out those greedy short-sighted hands.
you all are unbelievable! this is felicia's husband and you all are dillusional. SO let me lay something out for you. I work for my own company in the financial sector. I work my ass off to make payroll every month and as a result of my hard work, I get to enjoy reasonable compensation. So according to your socialistic plan, i get penalized if my wife goes to work for JPM, wells, or whomever else received TARP funds and all of a sudden even though she is a part time EE making next to nothing and receives a nominal bonus for her efforts, our entire family gets penalized at a 90% tax rate so the gov't can claim victory on a few greedy bastards that actually are corrupt. Also, because i am a prudent saver and i deferred a large sum of money for years of hard work, i am also going to get taxed a ridiculous amount there as well.
I fail to see any of your ridiculous points. we live in america and if i remember correctly, in a free capitalist society, people should be able to enjoy the fruits of their labor. just because a few of you have chosen different career paths that lead to less income, that is a choice you have made.
I am completely on board that the HANDFUL of crooked execs that have led their institutions into financial distress should be penalized, but it is just plain stupid to think it is logical to penalize every hard working successful person that is only guilty by association. believe it or not, alot of the EE's in these companies add a tremendous amount of value and make a ton of money for their shareholders (I assume you all invest in the stock market) If you have, I assume your expectation is to earn a return on your investment. that only comes by generating revenue and revenue is only generated by hard working, smart, people that are out there busting their butts every day making it happen. I am sorry you all fail to understand the basis on which our wonderful country is founded upon. please be my guest to move to another country that shares in your crazy ideals.
last point. 20% of the wealth in this country provide 80% of the economic activity. Now that the gov't sees fit to steal from the 20%, lets see the economy really go in the crapper. Is the gov't going to bail out all of the well to do americans that are now going to default on all of their home mortgages and debt because 90% of the income they deserve and earn every year is going to be taken away?
you all need a reality check!
We hope you have better tax information than what you're getting on the news. The GOP added tons of business tax breaks into the stimulus bill (which they then voted against)! No one's taxing your bonus unless you got bailout funds.
If these guys are working so long and so hard down at the office, then why is the company in the pits?
It is truly unbelievable that you equate the type of blood, sweat and tears that goes into a small business with the fatcat execs who do little or nothing as part of the huge wasteful bureaucracies these phantom companies push paper through. If these companies were run like the mon-and-pops, they would be just as successful as Felicia's husband, who can get his own BE account for FREE. Who's taxing your savings, anyway? Don't get that one -- try Turbotax next time.
Speaking of greedy corporate execs, is that nitwit Phil Klein correct about the Enterprise about to collapse and concerning all the turmoil and reassignments there at the Innertube? Tell us the truth, homes! We need to know if we're going to have to get all our news from the Examiner which sort of leaves the only alternative to -- as Sen. Grassley suggested for the AIG execs -- commit hari kari.
RE: hodehi
LOL...sorry to disappoint Mr. Klien but, No...we are not closing. The Enterprise is here to stay.
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