Schumer to AIG: Give back the bonuses or we’ll tax them away
posted at 4:05 pm on March 17, 2009 by Allahpundit
A zesty dose of outrage from the Senate’s second-biggest recipient of AIG campaign contributions. That’ll buy you a vote on the bailout, boys, but not even Schumer’s going to brave the flames of this populist brushfire. Reid said this morning that they’ll have a bill ready to go within 24 hours to target the bonuses at possibly a 90% rate; we’ve been arguing in Headlines ever since about whether that constitutes an unconstitutional bill of attainder. I’m skeptical as I suspect even a heavy tax wouldn’t qualify as “punishment” within the meaning of the clause, especially when recouping part of a massive bailout of a company the government now owns. An equal-protection argument would be hard too, as courts typically defer to legislatures unless they’re targeting a group based on race, gender, or religion. Sounds like the point is moot, though, as they’ll probably draft the bill broadly enough to hit any company that falls within its narrow parameters:
Rep. Gary Peters (D-Michigan) submitted a bill yesterday which would implement a 60% tax rate on all bonuses about $10 thousand, targeting employees of firms in which the U.S. government holds an equity stake greater than 79 percent. The bill is clearly aimed at the excesses of AIG, but is believed to avoid rejection as a “bill of attainder” since the bill covers any firm in which the government may hold nearly 80 percent or more ownership stake. Given the current conditions within the financial industry, it’s not a stretch to imagine other large banks fitting similar conditions if their liquidity does not improve.
Exit question: Is it time yet to start the AIG managed bankruptcy watch?
Blowback
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Yes
Vashta.Nerada on March 17, 2009 at 4:07 PM
Hitting Atlas Shrugged territory more and more, aren’t we?
Count to 10 on March 17, 2009 at 4:07 PM
Vision of the future, folks. Give or we’ll take.
Trent1289 on March 17, 2009 at 4:07 PM
Schumer should be in jail for his role in Indymac.
lorien1973 on March 17, 2009 at 4:08 PM
yup
joey24007 on March 17, 2009 at 4:08 PM
With the government deciding how much money these guys can make, it won’t be too very long before they decide how much money *I* can make.
MBuck on March 17, 2009 at 4:10 PM
When you elect communists to power, don’t be shocked when you get communism.
angryed on March 17, 2009 at 4:10 PM
This should have already been in the works.
ladyingray on March 17, 2009 at 4:10 PM
The bill as described probably skirts past the bill of attainder in letter, but not in spirit. How about publishing over and over the list of recipients of campaign cash?
Vashta.Nerada on March 17, 2009 at 4:11 PM
AIG should shut themselves down. Don’t back down to threats from politicians. SCREW THEM. Shut the business down NOW AIG… that’ll teach congress not to screw with you guys
originalpechanga on March 17, 2009 at 4:11 PM
More static analysis from the Left… AIG is on its way to a footnote under “The Newest Deal.”
mankai on March 17, 2009 at 4:11 PM
If paying tax is patriotic , they have to take the money..
the_nile on March 17, 2009 at 4:11 PM
Correct me if I’m wrong, but if they tax the bonuses at 90%, and these large bonuses typically are a large part of an executive’s salary, wouldn’t they be able to qualify for an exorbitant tax return? Am I missing something?
Matticus Finch on March 17, 2009 at 4:11 PM
Didn’t Dodd put in language into the bailout bill which excused these bonuses?
I thought I read that somehwere. If he did, the legislation is signed and is law – what exactly are they going to tax or “take away” if Congress authorized the bonuses to begin with?
catmman on March 17, 2009 at 4:12 PM
This does include Fanny Mae and Freddy Mac…………..
…………….. does it not?
Seven Percent Solution on March 17, 2009 at 4:12 PM
I believe I’ve read the excuse for the bonuses as being “that is how people in that industry normally receive their compensation.”
Does anyone have actual information as to the truth of that comment? What do the people receiving those bonuse make as base salary?
katiejane on March 17, 2009 at 4:12 PM
Does that include Freddie and Fannie?
Give it back, Franklin Raines!
BacaDog on March 17, 2009 at 4:13 PM
Correct me if I’m wrong, but I seem to recall reading that many of these bonuses were paid to non-US citizens. If that’s the case, even taxing away the “bonus” won’t actually recoup a large part of it.
I’m just getting more and more fed up with the showboating by the idiots that started this mess. Shumer, Dodd, Frank… all of them should be in jail for their roles in the financial mess.
darury on March 17, 2009 at 4:13 PM
So…we’ve got to give them billions because we can’t let them go bankrupt but we can’t let them run their business without penalizing them millions or perhaps billions.
Is there a single rational adult left in Washington?
Django on March 17, 2009 at 4:13 PM
Nah, haven’t you heard. They’re too big to fail.
Oldnuke on March 17, 2009 at 4:13 PM
How much of the bonuses is essentially standard income to people who do their job? I congress going to take away salaries that they find objectionable?
Oh, wait, they did that already.
Count to 10 on March 17, 2009 at 4:14 PM
My question: while this law may bypass attainder, how does it stack up in terms of ex post facto?
Vashta.Nerada on March 17, 2009 at 4:14 PM
Gee, Schmucky, if the tax hikes work on them perhaps you can try it out on everyone.
RobCon on March 17, 2009 at 4:14 PM
man they are scared.
rob verdi on March 17, 2009 at 4:14 PM
This bastard is up in 2010. I suggest he gets sent home.
CP on March 17, 2009 at 4:15 PM
Whoa, whoa, whoa, slow down Nelly…
They put Schumer out in front of a microphone on this… Oh, this is good. Barny Frank and Schumer out in front of this scam, kinda reminds me of Brokeback Mountain comes to the sacred halls of Congress.
Lying bastards knew of this entire contractual agreement a year ago.
Charles Chuck-u-schumer…. What a guy.
Keemo on March 17, 2009 at 4:15 PM
Meh, so’s the government, but they’re certainly trying their best.
Can we start taxing congressional salaries more? They’re receiving beaucoup bucks for running a failing enterprise getting seemingly endless government money, after all.
Snowed In on March 17, 2009 at 4:16 PM
When you buy a pig don’t be surprised when it acts like a pig.
Django on March 17, 2009 at 4:16 PM
Yep, this sets up the confiscatory tax justification on whomever “they” don’t like.
aquaviva on March 17, 2009 at 4:16 PM
Actually, I just prefer he fall on his sword.
javamartini on March 17, 2009 at 4:16 PM
katiejane on March 17, 2009 at 4:12 PM
Actually I heard a snippet that some companies which took bailout money are redoing their compensation packages.
Instead of giving “bonuses”, they are just going to raise the base salary of the employees.
catmman on March 17, 2009 at 4:16 PM
If the execs who took the bonuses are democrats,
I doubt they will pay the taxes!!!
LOL
izoneguy on March 17, 2009 at 4:16 PM
I suggest they all work for a dollar a year until the budget is balanced and defecits paid off. What’s fair for the CEO should be fair for the congressman.
Vashta.Nerada on March 17, 2009 at 4:17 PM
Yes, Dodd did, and the legislation is signed. But you don’t expect the One to actually read those long bills, do you? How can he prepare for Leno then?
As far as Dodd goes, the MSM will send it down the Memory Hole.
Wethal on March 17, 2009 at 4:17 PM
I don’t think it bypasses either. I think this is exactly why that section is in the Constitution.
Oldnuke on March 17, 2009 at 4:18 PM
Wow! Retroactive Taxes! That’s a new one! What a Clymer!
sabbott on March 17, 2009 at 4:18 PM
http://www.openmarket.org/2008/11/21/geithner-choice-is-more-of-the-same-was-paulsons-bailout-cohort/
On record… How will the MSM spin this one.
Keemo on March 17, 2009 at 4:19 PM
The government could reduce the $130 billion or so by .15% in order to cover the cost of the bonuses, if it is so concerned with AIG wasting taxpayer money. But I suspect that’s not grandstand-y enough for the average politician.
DarkKnight3565 on March 17, 2009 at 4:19 PM
Let’s open the books at GM and see what they have been doing with the bail-out money…..
I am sure UAW has seen billions go into their pot o’ money…..
Plus, all the politicians who received money from AIG should be paying the taxpayers back as well!!!!
izoneguy on March 17, 2009 at 4:19 PM
If these folks who’ve received money have a lick of sense, that money is in a bank vault in Dubai or the UAE.
AubieJon on March 17, 2009 at 4:19 PM
Wait until we see ours.
Vashta.Nerada on March 17, 2009 at 4:19 PM
I fear that this may be a planned and orchestrated precedent for the Democrats. Using taxation as a form of punishment or retribution is utterly disturbing. AIG should have been given over to bankruptcy – after all, our government knew about the contractual bonuses from the beginning. But it would appear that AIG has been kept on a kind of economic operating-table in order to justify a new genre of political surgery. In principle, we should all be concerned about anyone who would be willing to use the tax code as an instrument of punishment.
splatshot on March 17, 2009 at 4:20 PM
I would be willing to pay the legislatures $100K per year (less than they get now) with a $100K bonues for a balance budget (including entitlements, but not using payroll tax receipts for spending).
WashJeff on March 17, 2009 at 4:20 PM
Many of these people are in London, and given how Obama treated Brown when he was here, I doubt he’d be asking for any changes in British tax law about now.
Wethal on March 17, 2009 at 4:21 PM
Naw, we haven’t pumped nearly enough money into it yet. Same with GM. And, it’s painless. Freshly printed money doesn’t cost anything.
a capella on March 17, 2009 at 4:21 PM
Good point.
Taxes paid will reduce taxable income. So if someone were in the 40% bracket and had a large portion of their income (bonus) taxed at a higher rate, they should get 60% of the tax back – everything else being equal.
BacaDog on March 17, 2009 at 4:21 PM
Not merely content with the thought of an ex post facto law, we now have Reid proposing a bill of attainder
Unlike AP, I think that a targetted taxation which, according to the Founders of this particular law, is designed to punish those receiving the contracted bonuses, is indeed a bill of attainder.
Of course, it will depend on the Supreme Court, because that is obviously where this whole carfaffle is headed.
unclesmrgol on March 17, 2009 at 4:22 PM
The Washington crowd wants to focus on bonuses because it aims public anger on private actors, not the political class. But our politicians and regulators should direct some of their anger back on themselves — for kicking off AIG’s demise by ousting Mr. Greenberg, for failing to supervise its bets, and then for blowing a mountain of taxpayer cash on their AIG nationalization.
Whether or not these funds ever come back to the Treasury, regulators should now focus on getting AIG back into private hands as soon as possible. And if Treasury and the Fed want to continue bailing out foreign banks, let them make that case, honestly and directly, to American taxpayers. (WSJ)
Keemo on March 17, 2009 at 4:22 PM
RESCIND THE CORRUPT LEGISLATION
IMPEACH OBAMA
CHANGE WE CAN BELIEVE IN
maverick muse on March 17, 2009 at 4:22 PM
chucky shumer is an @ss
gatorboy on March 17, 2009 at 4:22 PM
Why are you agains throwing money into a great big hole!
lorien1973 on March 17, 2009 at 4:23 PM
From the WSJ this a.m.
http://online.wsj.com/article/SB123725551430050865.html
Hank Paulson and his friends at Goldman Sachs need to be investigated.
FAT CHANCE.
Angry Dumbo on March 17, 2009 at 4:23 PM
The idea that that son-of-a-bitch has the gall to get up and say anything about ‘messes’ really pisses me off.
BigWyo on March 17, 2009 at 4:23 PM
Meanwhile, those managing the profitable divisions of AIG start looking for work elsewhere. Which bodes really well for that huge taxpayer investment.
Karl on March 17, 2009 at 4:23 PM
The fact that Schumer, Dodd, and Frank are running around in high moral dundgeon is enough to make me puke.
These ass-hats should be in jail. Not threatening others with confiscatory tax rates.
Republicans would be wise to start pointing out how Dems facilitated this, and should have to eat it, in the name of contractual stability.
Iblis on March 17, 2009 at 4:24 PM
+1
maverick muse on March 17, 2009 at 4:24 PM
Speakup on March 17, 2009 at 4:25 PM
Matticus Finch on March 17, 2009 at 4:11 PM
I’m no expert either, but it makes a measure of sense…
Tax the crap out of the AIG execs to show how tough a populist you are, then allow those same execs (who make the big campaign donations) to get most of it back next year as a tax refund.
innominatus on March 17, 2009 at 4:26 PM
Dodd did put the language in. Schumer is full of baloney. The courts will end up squashing any tax they try to come up with. AND THE WHOLE THING IS A SMOKECREEN ANYWAY.
Look guys this whole thing is made up to get the Veteran’s Medical Scandal off page one.
dogsoldier on March 17, 2009 at 4:26 PM
maverick muse on March 17, 2009 at 4:22 PM
Yes Mav, Impeach Obama Now will be a battle cry coming soon.
Keemo on March 17, 2009 at 4:26 PM
Yep! And it should be a no brainer but with what’s happened with the second amendment around the country, Roe v Wade, Kelo vs New London etc. I’m sure it won’t be. Of course on the bright side AIG now has lots of money to pay lawyers.
Oldnuke on March 17, 2009 at 4:27 PM
I read alot of those bonuses went to London. How does Schmucky get his greasy fingers on that dough?
ctmom on March 17, 2009 at 4:27 PM
I think the bill of attainder argument is a good one because the 90% is obviously a punishment completely driven by public anger.
Kenrod on March 17, 2009 at 4:27 PM
“…and miles to go before I sleep.”
AubieJon on March 17, 2009 at 4:27 PM
.1% = the end of the world ($170 million in RETENTION bonuses… i.e. help us save our company $$)
2.3% = “we can no longer let the perfect be the enemy of the essential” (8,000 earmarks)
gatorboy on March 17, 2009 at 4:27 PM
I wonder how many bonuses were paid out by Deutsche Bank and the other European banks that took $90 billion from AIG… oh, what? We’re not supposed to ask that?
DaveS on March 17, 2009 at 4:27 PM
don’t be surprised when a bunch of flies circle around a pile of $hit.. they can’t help it
gatorboy on March 17, 2009 at 4:28 PM
I guess Schumer really does think we’re all stupid.
darwin on March 17, 2009 at 4:29 PM
You know how hard it is to FIND that book right now?
AIG is toast… who has the butter?
upinak on March 17, 2009 at 4:29 PM
slouching towards Statism.
Mallard T. Drake on March 17, 2009 at 4:29 PM
Sure. We don’t care about billions in pork, but we’re outraged over millions in bonuses.
Vashta.Nerada on March 17, 2009 at 4:30 PM
Threatening specific individuals with punitive taxes that negate a lawful contract?
Open your eyes to liberal fascism unleashed.
LimeyGeek on March 17, 2009 at 4:31 PM
http://pajamasmedia.com/blog/contributions-to-obama-campaign-track-bailout-money/
Read this…
Keemo on March 17, 2009 at 4:31 PM
Accident, Coincidence, or Enemy Action?
Seven Percent Solution on March 17, 2009 at 4:32 PM
We are supposed to be outraged by bonuses paid to AIG execs with bail-out money, and yet Schmucky say that no one cares about pork. Sounds like both are instances when taxpayer money is being ill-used. I’d be more upset about the bonuses if the Dems were more responsible about earmarks and pork barrel spending.
Mallard T. Drake on March 17, 2009 at 4:32 PM
It is funny, I think the original print run was around 50,000 copies, but in the 70′s the annual print run was twice that. I think now, the annual print run is even higher. I keep about four copies for loan out, and all are in use today…
Vashta.Nerada on March 17, 2009 at 4:32 PM
So now everyone who gets a bonus as an employee of a business that gets bailed out by the government is going to have that bonus taxed at 90%?
Those folks need to unionize; get into the government workers union since they are all bought and paid for government employees. And make the campaign contributions.
Skandia Recluse on March 17, 2009 at 4:32 PM
The bonuses are certainly, distateful (can’t think of a better word), but the idea of government taking them away is just as distasteful, if not more.
clearbluesky on March 17, 2009 at 4:35 PM
It’s 54 on Amazon books. I’ve emailed instaglenn a few times to promote the book more, since he’s always talking about Galt. Today, finally, he has a link to purchase the book.
lorien1973 on March 17, 2009 at 4:36 PM
It’ll never happen, because Chuck U. and his buddies own the media.
Del Dolemonte on March 17, 2009 at 4:36 PM
Can we tax away Schumer?
That would result in a far bigger savings.
What a walking, talking, absolute piece of garbage Chuck Schumer is.
NoDonkey on March 17, 2009 at 4:36 PM
Most military enlistment and reenlistment bonuses are $10,000 or more, and technically the U.S. government holds a stake greater than 79%.
It wouldn’t surprise me, given President Obama’s attitude towards the military, if those bonuses somehow got included in this.
BadgerHawk on March 17, 2009 at 4:37 PM
Yeah, hit the “reset” button on it.
What are they going to do about the Dodd amendment to Stimuturd, though?
Kid from Brooklyn on March 17, 2009 at 4:37 PM
Who’re you tryin’ to kid? We hit Statism months ago.
MBuck on March 17, 2009 at 4:39 PM
Well I’m not so sure. The latest Neilson ratings show FOX leading all other cable news networks by a three to one margin in all time slots. I appears to me that there is an adequate communications channel to spread the word. Add in talk radio and chances get even better.
rplat on March 17, 2009 at 4:40 PM
If AIG needed the bailout to say in business and the government had to give it the money for the good of the country, what justification is there for threatening to take back some of it now? Either AIG got too much money in the first place, that is more than it needed to say in business, or its failure won’t now spread through the economy, and it doesn’t deserve any bail-out money at all.
Fred 2 on March 17, 2009 at 4:41 PM
I don’t understand. One month ago, the average US taxpayer didn’t care about these porky little provisions.
Now they are outraged?
PappaMac on March 17, 2009 at 4:42 PM
Who is next for a targeted tax?
All Republicans?
People that listen to Rush Limbaugh?
People that criticize Obama?
People that visit Hot Air?
Oppressive actions by the U.S. Government.
albill on March 17, 2009 at 4:42 PM
Somebody check my math.
Appx 4500 AIG employees split $165M in bonus money = $36,000 each.
Barry received $3.6M in campaign contributions from financial firms that are in receipt of bailout money.
Who should we be angry with, again?
Vashta.Nerada on March 17, 2009 at 4:42 PM
I think the tax would actually violate the Contract Clause of Article I – Equal Protection wouldn’t really apply in this case since it’s Congress and not one of the states.
Contract Clause says you can’t do anything that impairs the ability to contract, and obviously this breaks a contract, so that’s something.
The argument in response is that the bailout money is the only reason why they’d be able to pay the bonuses in the first place, but even if AIG were liquidated sans bailout, those contracts would be among the first things honored (although I’ll admit my knowledge of bankruptcy law isn’t supergreat).
So, yes. The tax is unconstitutional.
So what? What judge is going to let them keep those bonuses? Judges are aware of what’s going on, and if they have to use an excise tax or whatever to get that money back, the judges will find a way to keep it legal.
Proud Rino on March 17, 2009 at 4:43 PM
I still don’t think this passes the smell test Constitutionally with regards to Bills of Attainders.
I believe that Justices CAN find that a 90-100% tax is a PUNITIVE measure on the governments part. And I think the Justices CAN find that, no matter how the bill would be written legally – the intent of it is aimed at one specific group of people who otherwise are legally entitled to this money. These guys have done nothing wrong – it’s their money for their services and it’s not like this just popped up out of thin air. The Government knew – or should have known – about these retention bonuses before we bailed out AIG.
People … This is wrong.
Also – Chucky Schumer looks real scary and pissed as he talks about these AIG guys. Too bad he NEVER talked about terrorists this way. Is it just me? Or do you guys see here that the Democrats have more contempt for the AIG guys – than they ever had for the Islamofascist trying to destroy this country?
HondaV65 on March 17, 2009 at 4:44 PM
Rush Limbaugh.
Snowed In on March 17, 2009 at 4:45 PM
In general, I want low taxes to stimulate growth. However, with those businesses that have received huge bailouts, and the government temporarily, I hope, owns more than 50% of the “assets,” I’m in favor of severely restricting bonuses by any lawful means.
Now, how do we restrict the earmarks and pork that members of Congress use to reward their contributors?
Loxodonta on March 17, 2009 at 4:45 PM
I’ll do you one better, he and his buddies Dodd and Frank should have been tried for treason for the mess they created.
John_Locke on March 17, 2009 at 4:47 PM
Schumer and his ilk have more contempt for AMERICA than for the Islamofascists.
MBuck on March 17, 2009 at 4:47 PM
Saying the tax is a bill of attainder seems like a stretch to me.
Like, a Michael Moore’s underpants kind of a stretch. And now that I’ve imagined that, I will never be able to un-see it, so I’m going to go ahead and stab out my eyes.
Proud Rino on March 17, 2009 at 4:48 PM
It is too easy to get bogged down into the “legaleze” related to bills of attainder, bills of pain, etc., and SCOTUS seems to have (wisely) seen through legislative smoke and mirrors in this regard.
What is more important to consider is this: a legislative body exists to pass laws that are forward-looking and apply to all individuals equally. A judicial body exists to determine the effect of these laws in individual cases, handing out fines, judgments, etc., as the law demands.
The atrocious thing about what Congress is doing is that it apparently seeks retribution in the form of a “tax.” Can they escape the obvious conclusion that they intend to retroactively punish these AIG executives with this bill?
Allah is wrong re: the form of the punishment, in my humble estimate. Calling something a “tax” does not make it a tax when it’s really a fine.
One more thought: I’m not sure when these bonuses were approved (it sounds like months ago, right?) but was the government a majority shareholder at the time? I guess I don’t understand the necessity of a bill setting the government ownership mark around 80% when majority ownership means you get to exercise control over the corporation. Am I missing something here?
BTW, if they’re reaching back so far with the bill, then that’s one more reason to think Congress is wiping its collective a** with the constitution.
cackcon on March 17, 2009 at 4:48 PM
Good point and bonuses for military physicians/pilots can go way over $10K.
Course maybe easily findable knowledge like that goes above a Senator’s paygrade.
NoDonkey on March 17, 2009 at 4:48 PM
LOL
Vashta.Nerada on March 17, 2009 at 4:48 PM
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