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Taxing the bonuses

Meadmaker

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Meadmaker
Joined
Apr 27, 2004
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What do people think about this tax that Congress is up for, to tax AIG bonuses at 90%?

Like most of you, I don't think executives that ran a company into the ground, and took the world economy with them, deserve a bonus. Come to think of it, they don't deserve a salary. Come to think of it, it wouldn't upset me to see criminal investigators go on a fishing expedition just in the hopes that their highly paid lawyers overlooked something, and they could actually be thrown behind bars. I doubt that they did anything illegal, but we can always hope. The point is that I don't think they deserve any money at all, much less million dollar bonuses.

Having said that, though, I really don't like the idea of retroactive taxation. It's like an ex post facto tax. Come to think of it, since it is aimed directly at specific individuals, it's practically a tax of attainder.

In other words, the government is basically saying, "We understand that you made a bunch of money, and we understand it was legal, but we don't like how you did it, so we're taking your money." It just seems like a really horrible precedent.

As I said, I have no love for the AIG executives who got our money. I think they provide an object lesson of everything wrong with American society (at least, on the top end.) I'm sure they pat themselves on the back for their amazing hard work and brilliance, and declare solemnly that the company desperately needs them and only them, and that their incredible talents make them worth every penny of their ridiculous salaries. I'm sure they firmly believe that, despite all evidence to the contrary, they are financial geniuses entitled to live a life of luxury. I would like nothing better than to see them lose it all and have to get real jobs. Still, it just strikes me as a little bit scary to see the government going in and retroactively take someone's money like that.

I mean, I don't think baseball players ought to make their ridiculous salaries, either, but I would hate to see an A-Rod tax, seizing 90% of all baseball player salaries about $500,000 per year.

So, what do others think? Is this something to be concerned about? Is it just not in the realm of possibility that the government will some day decide that someone else's money, like mine or someone I know, came from ill gotten gains and is subject to a special tax to take it away? It just leaves me with an uneasy feeling.

But....if we can do this sort of thing, can we pass a 90% tax on lawyer contingency fees above $100,000, retroactive to the beginning of the year?
 
Meadmaker said:
So, what do others think? Is this something to be concerned about?
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Yes.

Is it just not in the realm of possibility that the government will some day decide that someone else's money, like mine or someone I know, came from ill gotten gains and is subject to a special tax to take it away? It just leaves me with an uneasy feeling.
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With good reason. This is a phenomenally awful precedent: levying a tax aimed at particular individuals. The power to tax is the power to destroy. Now, not all precedents get followed, and hopefully this one is bad enough that it will stand alone in perpetuity. But the best way to make sure that happens is for voters to let it be known that they think it's a bad precedent.
 
Ziggurat said:
Yes.



With good reason. This is a phenomenally awful precedent: levying a tax aimed at particular individuals. The power to tax is the power to destroy. Now, not all precedents get followed, and hopefully this one is bad enough that it will stand alone in perpetuity. But the best way to make sure that happens is for voters to let it be known that they think it's a bad precedent.
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If they can do this to the rich and powerful, they can do it to you.
 
This is a frikkin terrible precedent. I really, really do not like it.

If it was a conditional of the bill, then they'd be under any other breach of contract (or in this case, breach of the law of the United States) which would have significant penalties.

The bill got passed without the necessary language, despite some efforts, so we have no real resort.

This taxation is nonsense. It is a bad bad move, and it sets an awful precedent. I really despise it more than I despise the bonuses. It's confiscation, the same BS that SWAT teams routinely pull.

Of course this will get 10 times the attention because it's happening to wealthy people, but just because I hate the inequality in treatment doesn't mean I don't ALSO hate government confiscation.
 
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My understanding is that the tax is not considered retroactive because it applies to THIS tax year, long before 2009 taxes have been filed.

At least that's what my tax law professor said.
 
Why worry about a $3T budget when there's evil capitalism to vilify. Let's get all the AIG executives and put them on trial. Don't worry about the charges, they must have done something wrong, right? It would be fun to see Chris Dodd-ge called to the stand and take the 5th. Maybe we can put him in charge of running universal health care or something.

Hope and Change, says so on the teleprompter.
 
This idea is very troubling. I do not support the tax.
 
The tax is unconstitutional as it discriminates and taxes a certain group of people. If this does indeed pass, I'm certain that the judicial system will shoot it down.
 
Very bad idea.
The "Bonuses" were, as far as I can see, essentially Retention Bonuses. I have even gotten those, as an engineer, because my particular skill set was in very high demand at the time, and the chances of large numbers of us walking across the street was great.
These, however, were almost in the way of "Denial of Service" type "bonuses", which was to keep people from leaving and carrying secrets and skills (and customer lists!) to somebody else.
Kind of like the old days in the NCAA, where Nebraska would put a kid on scholarship, even though he didn't fit their plan, just to keep Colorado from getting him and using him. The question really boils down to "Where the hell are they going to go?" (I heard that on TV lately)
While the "bonus" criteria were porly worded, and not actual bonuses, the legislation is very badly worded also. Aimed legislation like this often brings the Law of unintended consequences into strong play.
 
rwguinn said:
Very bad idea.
The "Bonuses" were, as far as I can see, essentially Retention Bonuses. I have even gotten those, as an engineer, because my particular skill set was in very high demand at the time, and the chances of large numbers of us walking across the street was great.
These, however, were almost in the way of "Denial of Service" type "bonuses", which was to keep people from leaving and carrying secrets and skills (and customer lists!) to somebody else.
Kind of like the old days in the NCAA, where Nebraska would put a kid on scholarship, even though he didn't fit their plan, just to keep Colorado from getting him and using him. The question really boils down to "Where the hell are they going to go?" (I heard that on TV lately)
While the "bonus" criteria were porly worded, and not actual bonuses, the legislation is very badly worded also. Aimed legislation like this often brings the Law of unintended consequences into strong play.
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Seriously, which one of AIG's secrets will they sell? AIG's investment strategy? Perhaps their secret portfolio of high-profile investors that they just made payouts to on the public dime (and is thus very public)? I know! They'll give away the state of AIG's finances, and competitors might sense weakness.
 
It's extremely unconstitutional and violates the separation of powers, in that it essentially means the Legislative branch is usurping the powers granted to the Judicial.

I don't think anyone doubts that AIG is wrong here, but I'm sick and tired of seeing disingenuous government power-grabs every time there's public outrage about something.
 
WE own AIG. WE bailed them out. WE kept them breathing.

If WE want to tax their bonuses 100%..that is OUR right.

It is OUR company!!!
 
Phrost said:
It's extremely unconstitutional and violates the separation of powers, in that it essentially means the Legislative branch is usurping the powers granted to the Judicial.

I don't think anyone doubts that AIG is wrong here, but I'm sick and tired of seeing disingenuous government power-grabs every time there's public outrage about something.
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right. we should have just given AIG $170 billion with NO strings attached. want to use the money to buy a yacht? a jet? an oil tanker?

no problem!!! right?
 
parky76 said:
WE own AIG. WE bailed them out. WE kept them breathing.

If WE want to tax their bonuses 100%..that is OUR right.

It is OUR company!!!
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Are you being sincere? I don't spend as much time here as I once did, and digital sarcasm is often tricky to spot.

If you are being sincere then no, it is not our right to tax them. It may have been under the scope of "our" (the government's) control to prevent the bonuses from being paid out, but it is, horribly, dangerously idiotic to allow your government the power to punitively tax individuals based on public sentiment and outrage.
 
parky76 said:
right. we should have just given AIG $170 billion with NO strings attached. want to use the money to buy a yacht? a jet? an oil tanker?

no problem!!! right?
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Ok, so you were being sincere.

Think beyond AIG to the bigger picture.
 
Unconstitutional, and easily appealed on such grounds should it pass. It could never stand.
 
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