100% tax on AIG bonuses

[Zee]

Reps. Steve Israel (D-NY) and Time Ryan(D-Ohio), introduced a bill that would tax the AGI bonuses at 100%.

Frankly, I like the idea. Rep Rangel doesn't like using the code as a "political weapon". There's something to that argument also.

However, I think it's about time we stopped this type of Corporate practice flat in it's tracks. They misused funds were intended to help stimulate this economy, not enrich those who caused it. This "loophole" wasn't covered in the haste to offer a solution (good or bad), and shouldn't be tolerated. Are there no ethical morals any more?

[gkaiseril]

Reps. Steve Israel (D-NY) and Time Ryan(D-Ohio), introduced a bill that would tax the AGI bonuses at 100%.

Frankly, I like the idea. Rep Rangel doesn't like using the code as a "political weapon". There's something to that argument also.

However, I think it's about time we stopped this type of Corporate practice flat in it's tracks. They misused funds were intended to help stimulate this economy, not enrich those who caused it. This "loophole" wasn't covered in the haste to offer a solution (good or bad), and shouldn't be tolerated. Are there no ethical morals any more?

Paid in England to English citizens by an international holding company. How much income tax will be collected by the U.S.

Also there are many wage earners that have taken pay cuts, forloughs, or benefit cuts to keep jobs.

We will see how much of a team player these people are when the going gets tough.

[gkaiseril]

Who Actually Got the Money?

Reps. Steve Israel (D-NY) and Time Ryan(D-Ohio), introduced a bill that would tax the AGI bonuses at 100%.

Frankly, I like the idea. Rep Rangel doesn't like using the code as a "political weapon". There's something to that argument also.

However, I think it's about time we stopped this type of Corporate practice flat in it's tracks. They misused funds were intended to help stimulate this economy, not enrich those who caused it. This "loophole" wasn't covered in the haste to offer a solution (good or bad), and shouldn't be tolerated. Are there no ethical morals any more?

Paid in England to English citizens by an international holding company. How much income tax will be collected by the U.S.

Also there are many wage earners that have taken pay cuts, forloughs, or benefit cuts to keep jobs.

We will see how much of a team player these people are when the going gets tough.

[Zee]

Drats! Of course, you're correct. What good will this do unless the recipients are US Citizens working in the UK?

Then "off with their heads", isn't this an English tradition?

[thomtax]

Personally, and I don't mean the ones getting a $1-3,000 bonuses, would like to see the extreme bonus holders taken out back to the woodshed for a discussion with a rubber hose.

However, I strongly disagree with the special tax provisions. Once it happens, it's that much easier when someone gets upset with, say tax preparers, to put a special tax on them. It smacks of political punishment and the trend worries me.

Now that I think of it, how come there is not a special tax on the senators and congressmen receiving bribes and special interest payoffs? It would seem to be fair treatment.

LT

[DaveO]

To do this would require a "Bill of Attainder" which is specifically forbidden by our constitution. Then again, I'm still looking for the constitutional authority for the bailout in the first place. If they are willing to ride rough shod over the constitution to bail them out they might just do it again to slap them down.

[David1980]

The original mistake was the bailout in the first place. The money was basically handed over with very few restrictions. The fact they didn't use it in the way the govt wanted is because the govt didn't tell them they had to.

That said, the bonus system seems a bit fraud like... Locking in bonuses at a good year when you know the coming year is going to suck? Seems a fairly intentional theft of taxpayer dollars. I'm not sure the tax code is the right place to fix it though.

[Zee]

Of course the tax code isn't the best fix and if was all/most paid to UK citizens it won't work anyway. From what I've read, the contracts and payments were legal. That doesn't make it any easier for the average "Joe the Plumber" (although he's probably a millionaire now) to understand how the restriction could have gotten overlooked in the bailout legislation. It seems like I read today it wasn't. It just isn't right. Bonuses should be performance-based not retention based or a combination of the two. None of the recipients seems to have qualified for a gold star performance year.

[BHoffman]

Personally, and I don't mean the ones getting a $1-3,000 bonuses, would like to see the extreme bonus holders taken out back to the woodshed for a discussion with a rubber hose.

However, I strongly disagree with the special tax provisions. Once it happens, it's that much easier when someone gets upset with, say tax preparers, to put a special tax on them. It smacks of political punishment and the trend worries me.

Now that I think of it, how come there is not a special tax on the senators and congressmen receiving bribes and special interest payoffs? It would seem to be fair treatment.

LT

I'm with thomtax. It's a slippery slope. I thought our esteemed leaders had decided to simply omit the amount paid out in bonuses from the next bailout payment. Let's see....What is $30 billion less 1.65 million? Chump change. Change you can believe in! The US people elected a philosopher and now wonder why he is hopeless at managing his administrative responsibilities.

He's likely to be around for the full 8 years. ACORN is going to be in charge of the Census groundwork. Nice touch.

I used to believe Mr. Obama was just a socialist. I was wrong. This is fascism.

Ammo, gold and Dinty Moore. Stock up.

[Zee]

I don't think it's fair to blame Obama. If it was such an easy fix, why didn't our former President fix the mess before he left office? Everything was well on it's way to disaster. It's probably best to stay away from the other politics involved on this board.

There wasn't much choice, was there? It was either a bailout, or a looming deep depression with AIG and other failures. What else could he really do? Everyone wants to get out of the economic hole we're in as quickly as possible.

Because of the rush to get things done, situations like this slipped through the cracks and AIG and others rushed to take advantage of the loopholes.

Do I think adding a provision to the tax code is an answer? Not really. But, I'd like to see some of the "multi-million" dollar babies collecting unemployment. I sure wouldn't want them managing my assets.

[taxea]

Gee, when did we become a political forum? Well, okay, I will jump in.
Obama promised us change and he also promised us no more lobbying and no more pork.
I have come to believe that this was just a means of getting into office. Now he is blaming the prior administration. It is okay to blame them for getting us into this mess...but, remember, it was his party that had a huge hand in this happening.
And as for the stimulus packages that have been put out...it is sheer BS to blame the pork added to the bills on the prior administration. I would have had more respect for him if he had refused to sign the bills with all the pork in them. Or if the congress had read the bills before passing them and him before signing.
He didn't have to sign any of them if he did not approve or agree with what was in them. He is responsible for not insuring that oversight was including in any monies that were doled out. He didn't. And now he claims to be outraged because all of these companies are going to expensive retreats and giving huge bonuses. You just can't put this on Bush! Bush didn't sign the bills.
Good luck on taxing the bonuses...wouldn't that be descrimination...going after a specific company when he and his cronies allowed others to do the same and did nothing to stop it.
Sorry but this is all on Obama's shoulders for his lack of making the changes he promised. taxea

[Zee]

Gee, when did we become a political forum? Well, okay, I will jump in.
Obama promised us change and he also promised us no more lobbying and no more pork.
I have come to believe that this was just a means of getting into office. Now he is blaming the prior administration. It is okay to blame them for getting us into this mess...but, remember, it was his party that had a huge hand in this happening.
And as for the stimulus packages that have been put out...it is sheer BS to blame the pork added to the bills on the prior administration. I would have had more respect for him if he had refused to sign the bills with all the pork in them. Or if the congress had read the bills before passing them and him before signing.
He didn't have to sign any of them if he did not approve or agree with what was in them. He is responsible for not insuring that oversight was including in any monies that were doled out. He didn't. And now he claims to be outraged because all of these companies are going to expensive retreats and giving huge bonuses. You just can't put this on Bush! Bush didn't sign the bills.
Good luck on taxing the bonuses...wouldn't that be descrimination...going after a specific company when he and his cronies allowed others to do the same and did nothing to stop it.
Sorry but this is all on Obama's shoulders for his lack of making the changes he promised. taxea

Gee.... I wonder if you're a Republican or Democrat. I'm an Independent. IMHO, both parties are equally to blame including the former administration for allowing the situation to occur in the first place.

[taxea]

Gee...so am I.

[Zee]

Gee...so am I.

I'm happy to hear that. I guess we have to just agree to disagree. Laying all the blame on Obama seems awfully one-sided to me.

Do you really believe all the blame should be laid on Obama and the current administration? Or am I mis-reading your post?

[David1980]

Good luck on taxing the bonuses...wouldn't that be descrimination...going after a specific company when he and his cronies allowed others to do the same and did nothing to stop it.

Yes, and if it does become law it would be something for the courts for sure.

That said, it isn't a flat out "90% tax on AIG bonus" on the tax return. I read on one article it would apply to employees with over $250,000 of income from a company that received at least $5 billion in bailout funds. It's the retroactive and obvious purpose that would bring issues...