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Taxing the bonuses

Allen773 said:
Corporations have done more harm to this nation (and the rest of the world) than the U. S. government could ever hope to.

Punish them.
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Jobs? We don't don't need no stinking jobs! Punish them all!! Power to the People!!!!



Where's my welfare check by the way! It's late! Stupid government.
 
leftysergeant said:
You mean they will be afraid to invent some new kind of financial vaporware for fear of a crowd of peasants with shotguns at their doorsteps?
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Lefty, I want you to hold that thought. And repeat it in public at every possible opportunity for at least the next four years.

Thanks.
 
a_unique_person said:
I don't think a lot of people realise just how close to the abyss we are.
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It's not the end of the world. There are plenty of resources (food, shelter, etc) to take care of everybody. But if excessive corporate greed threatens the distribution of these resources to the people, the government (of the people) will be forced to take over.

The world won't end but capitalism might. So it is up the capitalist pigs to find a solution if they want to maintain their lavish lifestyles.
 
There are two issues here, and some people are confusing them.

There's the issue of whether AIG ought to have paid bonuses to these people.

I've spent 25 years now in the cubicle land of corporate America. I've seen bosses at all levels come and go, from CEOs to my immediate managers, and everyone in between. They have left because they were fired, because they got better jobs somewhere else, because they retired, and because they died. My job hardly ever changed.

The point of this anecdotal evidence is that I think executives are highly overrated. Sure, they are important, but they can be replaced, and for that reason I think they are highly overcompensated. I think for every guy who won't bother showing up to work unless he is paid two million bucks, there's a guy out there with more ambition, energy, and talent, willing and able to do the same job for a mere million. I think the only reason the megasalaries are paid is pure power. The execs control the board, and have the power to make sure the "executive compensation committee" determines that the current crowd of execs is severely underpaid unless they get an extra million, and that the company certainly couldn't do without them. Of course, for this service of attending a few meetings a year, and keeping a very well connected Rolodex, the board members themselves are compensated with a few hundred thousand bucks. In other words, I don't think the bonuses were money well spent.

However....that's not the issue. There is something very frightening about the government walking in and choosing who gets to keep their money. I have no problem with the new government pseudo-owners paying less compensation to exectives who are in charge of failed firms taking bailout money. Seems perfectly reasonable. To use the tax code to correct problems like that, though, seems like a very, very bad idea.
 
I don't see this as a dangerous precedent, in any kind of legal sense. Either the government can do this, or they can't. If they can, they can now, and have been able to since at least the passage of the 16th amendment, if not longer. The fact that they haven't might serve to allay some fears? And if they can't, of course, they can't. I think they can - I basically agree with all of Flaming Moe's post, except for the part about takings - I don't think it would be upheld as a taking for a public purpose, but rather as not a taking at all. After all, if it were a taking, you'd need just compensation. How would that work?

Is it a good idea? I don't know - it's hard for me to feel strongly about it. On the one hand, the bonuses add up to a drop in the bucket compared to the size of the bailout, so it's hard for me to get up in a populist furor. On the other hand, I have absolutely no sympathy for the intended recipients either.

The way I see it, when a contract is formed, or when conditions under a contract are met, one side gets certain rights against the other. These people got the right to this money back at that point in time. They just, for whatever reason, had it arranged so they wouldn't actually get the money until later. But the money was basically theirs. It's been theirs all along. And now they're getting what's theirs. I guess I think we should have a better reason to tax it away from them than the appeasement of the mob.

Now if you'll excuse me, I have cake to eat. I heard something about "too big to fail" and I'm hoping to qualify.
 
linusrichard said:
I don't see this as a dangerous precedent,
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Looks like now they are talking about controlling salaries of not only those companies that get bailout money but others as well.

http://www.foxnews.com/politics/ele...tration-seeks-regulate-executive-pay/100days/

March 22, 2009

The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a plan to overhaul financial regulation, the New York Times reported.

... snip ...

The regulations would reportedly cover all financial establishments, not just those receiving federal bailout aid and would likely work to ensure executive pay was in line with the financial interest of the company.
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The socialists are on the march.
 
BeAChooser said:
The socialists are on the march.
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Yeah, I knew it was just a matter of time before they started stealing money from large corporations and distributing it to the poor and middle class...

Oh, wait....
 
Taxing the bonuses 90% was a typical knee jerk politician response.
If they were bound by contracts I believe they should have paid them. And I hate an after the fact law change. Although then again maybe after the fact taxes are good. Why don't we go after the executives at Fannie and Freddie , Citi , Wamu etc who were pulling bonuses much higher than this when they were starting to run the companies into the ground.


Although 90% see high that tax rate was almost a reality back in the late 50s and early 60's in the US. Although I think there was a maximum tax on personal services like wages that was 50%.
 
Meadmaker said:
There's the issue of whether AIG ought to have paid bonuses to these people.
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Was it in their contract? Then yes they should have been paid. Liberals are oversimplifying the issue as simple corporate greed, never mind that these individuals have accepted a salary of $1 a year. The current demand that these bonuses be returned is a populist fueled political witch-hunt. End of story.
 
Rika said:
Not just liberals.
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True, but whenever I see someone getting in an uproar over the issue typically they have a liberal agenda. But every self-made inquisitor likes a good old fashioned witch-hunt regardless of their political agenda.
 
Not that anyone cares (no one responded to my post), but I don't think the law violates ex post factoWP protection:

A large "exception" to the ex post facto prohibition can be found in administrative law, as federal agencies may apply their rules retroactively if Congress has authorized them to do so. Retroactive application is disfavored by the courts for a number of reasons,[4] but Congress may grant agencies this authority through express statutory provision. Furthermore, when an agency engages in adjudication, it may apply its own policy goals and interpretation of statutes retroactively, even if it has not formally promulgated a rule on a subject.
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The IRS is an administrative agency under the Treasury.

The slightly better question is whether or not the law violates the "equal protection" clause by tartgeting a small group of individuals. I don't think this is an issue either since it only targets companies who took TARP funds.

Please stop saying what is or what is not constitutional without looking it up. It is a horrible pet peev of mine.
 
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To edit the post above...that may only apply to administrative rules which are different than Congressional statutes.

That being said, I still don't think it violates ex post facto.
 
Kthulhut Fhtagn said:
Was it in their contract? Then yes they should have been paid. Liberals are oversimplifying the issue as simple corporate greed, never mind that these individuals have accepted a salary of $1 a year. The current demand that these bonuses be returned is a populist fueled political witch-hunt. End of story.
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There's something I don't understand. In what sense are these "bonuses" if they are contractually obligated? Wouldn't they just be "annual salary payments". When I think of a "bonus", I think of a payment made that is related to performance. Their performance was, for the most part, lousy. Their bonus ought to be rather small or nonexistent as a consequence.
 
Meadmaker said:
There's something I don't understand. In what sense are these "bonuses" if they are contractually obligated? Wouldn't they just be "annual salary payments". When I think of a "bonus", I think of a payment made that is related to performance. Their performance was, for the most part, lousy. Their bonus ought to be rather small or nonexistent as a consequence.
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If it's labeled as a "Bonus" in the contract, there is no withholding on it. There may be tax advantages--I'm not an expert. "I'm an engineer, jim-not a miracle worker"
I do get "Longevity Bonuses" for not leaving the current contract I am working under. They are not a Productivity bonus, or performance bonus, but are based simply on working the project for 6 months, performing well enough to not get fired/not leaving for greener pastures, and are based on number of hours worked in that period.
On one job, I got a "retention bonus" of about 13% of base salary, for much the same reason. That value, however, became a part of the base for the next year.
Essentially, they take the place of paid vacation. I get "paid in lieu of vacation" since I get no bennies at all.
These are probably similar.
 
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