House passes 90% tax on AIG bonuses
posted at 3:15 pm on March 19, 2009 by Allahpundit
328-93, which means the GOP split roughly evenly notwithstanding the news that some AIG employees will be returning their bonuses voluntarily. No surprise given the results of yesterday’s Gallup poll. I’ve reached the point the boss and Rick Santelli reached a few days ago and which this trader reached today: Aren’t we, er, missing the big picture?
The Fed yesterday committed to buy $1.5 trillion in assets, and all that we are talking about today is $146 million in bonuses for traders at AIG. I understand the politics and the optics of the situation but this is getting ridiculous. People need to get some perspective.
Initially I thought the tax would be a nifty way out of the bill of attainder problem, but Tom Maguire makes a sterling point about precedents. First they came for the bonuses…
Right now it’s AIG and Fannie Mae; later it will be Merrill and Citibank, and eventually it will be defense contractors, profiteering oil executives, or whomever the Congressional Dems single out as their whipping boy du jour.
And of course, rolling this ex post tax out at the same time the Fed and Treasury are trying to encourage private investors to partner up with the government to get the credit markets moving again is insane. What investor needs the likely aggravation to follow? Who needs to be hauled in front of Barney Frank a year from now in order to be blasted as a profiteer who exploited our national crisis for his own profit, which Barney will then tax back? Who will be daft enough to come out of retirement as Liddy did to endure the abuse Liddy took?
Follow the link and you’ll find that even Rangel’s iffy on the idea. Exit question: How much tighter can those congressional sphincters get? Click the image to watch.
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
Comment pages: « Previous 1 2 3 4 Next »
Dems made the mess and you’re bragging about who grabbed the right mop?
Ronnie on March 19, 2009 at 3:41 PM
Gotta say this: at least Ron Paul has some guts. More guts than half the Republicans in the House.
MadisonConservative on March 19, 2009 at 3:41 PM
The bill is HR 1586. My Rep voted against it. whew!
becki51758 on March 19, 2009 at 3:41 PM
This is just the beginning. The Fascists are only conditioning the cattle for this purpose: to dictate what EVERYBODY will EARN in the future, and to TAX same at a level which will destroy the incentive to work hard.
This is just the beginning.
OhEssYouCowboys on March 19, 2009 at 3:42 PM
I think, honestly, that they have good intentions and they are trying to do what they perceive as right. But, they do not look at what these actions can do or have done in the past. Thus, they are incompetent.
Could they be evil? Of course they could.
But never assign to malice, that which can be explained by stupidity.
It applies, I think.
lorien1973 on March 19, 2009 at 3:42 PM
testing
faraway on March 19, 2009 at 3:42 PM
Yeah, arguing with cons is entertaining but no need for the name calling.
I am right more than rush .
getalife on March 19, 2009 at 3:42 PM
Hmmm, wasn’t this type of exploitation Team Obama’s rallying cry?
Maquis on March 19, 2009 at 3:43 PM
That’s not how it works.
lorien1973 on March 19, 2009 at 3:43 PM
Speakup on March 19, 2009 at 3:43 PM
any aig employee that gives back his bonus is a tool.
this is just a stupid distraction.
who cares?
its .00001 percent of the money or something.
idiots…all of you…all of us (except me)
The Wall on March 19, 2009 at 3:43 PM
Here’s the text in question. Qualified compensation that will get whacked at the 90% level is defined as “TARP bonus” meaning any individual for any taxable year, the receiving the lesser of the aggregate disqualified bonus payments received from covered TARP recipients during such taxable year, or the excess of– the adjusted gross income of the taxpayer for such taxable year, over $250,000 ($125,000 in the case of a married individual filing a separate return).
TARP recipients are any person who receives after December 31, 2007, capital infusions under the Emergency Economic Stabilization Act of 2008 which, in the aggregate, exceed $5 billion, Freddie Mac and Fannie Mae, and any person who is a member of the same affiliated group or partnership who received the $5 billion in TARP funds.
Of course, lost in all this is the fact that the Treasury hasn’t been able to track who got all that money, but there are hints at significant number of banks that would get hammered by it (and probably one of the reasons that so many bank CEOs are rushing to get out of TARP – so as to avoid getting whacked by Congress wielding the confiscatory tax stick).
lawhawk on March 19, 2009 at 3:43 PM
Here come the lawsuits. (And rightfully so.)
gregbert on March 19, 2009 at 3:44 PM
If they “give it back” will the tax write off be better then keeping the bonus and being taxed…
right2bright on March 19, 2009 at 3:44 PM
MadisonConservative on March 19, 2009 at 3:37 PM
Thanks MC for the Roll Call. And Uh… I’d like to apologize to you for being such a knucklehead in my comments to you a few weeks ago, I don’t know what got in to me. Sincerely sorry about that, I’ve regretted every since.
Maxx on March 19, 2009 at 3:44 PM
Not impressed by this fradulent outrage.
therightwinger on March 19, 2009 at 3:44 PM
Hey congress thinks your paycheck is too much…
90% tax for you….
Kuffar on March 19, 2009 at 3:44 PM
I heard a snippet on the radio this morning that some of the AIG bonus payouts were made to British employees working in the British branches of the company. If that is the case, guess they aren’t getting all the money back.
This whole thing is ridiculous. I guess all Americans can now expect the retroactive tax laws for all of us to be next. Bend over, everyone. Can’t make too much money under the new administration or you’ll take it up the tailpipe.
BakerAllie on March 19, 2009 at 3:44 PM
Half the recipients are foreigners and won’t be subject to the tax. It’s all for show.
lorien1973 on March 19, 2009 at 3:44 PM
Aren’t the AIG folks receiving these bonuses based in the UK? Doesn’t this set Congress up for some embarrassment if it turns out that a good number of the recipients are foreign nationals living overseas outside the reach of US tax law?
These people are nuts. Since Treasury guaranteed the bonus payments with its insertion of the bonus protection in the stimulus bill, will recovery.gov report on the amount that has been returned or recovered via taxation?
rw on March 19, 2009 at 3:44 PM
It’s good that you think so highly of yourself, since nobody else thinks anything of you.
MadisonConservative on March 19, 2009 at 3:45 PM
If our congress were firemen and saw a house up in flames, they would leave the fire, run down to the nearest hardware store and yell at the proprietor for selling matches.
And the house would burn to the ground.
Sort of like what’s happening to our country.
fogw on March 19, 2009 at 3:45 PM
He was the only politician to blame Congress, both sides, in this debate today.
I enjoyed his speech.
getalife on March 19, 2009 at 3:45 PM
From what I can see the Dems didn’t play a damn thing…we just got us some real effed up Republicans tripping up on the contagion of power from your side of the aisle. Not good.
RepubChica on March 19, 2009 at 3:45 PM
If I was Liddy, Id quit. Let Tiny Tim handle the mess he made.
becki51758 on March 19, 2009 at 3:46 PM
You really are an idiot and should just stick to your “hey the stock market is up today” mantra.
Oops, stock markets down again today. What say you, getaclue?
Knucklehead on March 19, 2009 at 3:46 PM
I don’t even remember what it was, so don’t worry about it. In the long run, all these tiffs between our side, be it over the stimulus, be it criminals in Congress, or be it Meghan McCain, all fade when reality continues to smack us in the face.
MadisonConservative on March 19, 2009 at 3:46 PM
I agree. Two 6 year terms for Senators; expand Representative’s terms to 4 years per, and limit them to 3 terms. This allows them a break from the present “always campaigning” two year term.
Patrick S on March 19, 2009 at 3:46 PM
This is yet another victory in the socialist’s efforts to destroy our free enterprise system.
Should the government get away with this blatantly illegal act, none of us are safe.
There will be one benefit, though. More companies will start to reject future bailouts, because they aren’t going to want to have to deal with the hideous baggage that comes with them.
-Dave
Dave R. on March 19, 2009 at 3:47 PM
Thank you, my guy voted for it also. My phone call wasn’t on the “winning” side. He did vote against the stimulus though. I will write him a scathing email later.
Cindy Munford on March 19, 2009 at 3:47 PM
Your posts are nonsensical, hows that.
I love how the GOP is evil incarnate- until you need them for cover. Then their yes votes become validation of your idiotic ideas.
You cant randomly break a contract because its politically popular- thats why we have contract law in this country.
You people are children.
Chuck Schick on March 19, 2009 at 3:47 PM
Lovely, Congress commits an act of supreme legislative malpractice by passing a Bill no one had time read, much less digest or debate… Now they’re compounding that mistake by passing what amounts to an unconstitutional Bill of Attainder to cover their tracks.
Damn the Constitution, full speed ahead!
Idiots.
jasetaro on March 19, 2009 at 3:48 PM
You sure about that? Want to say that to my face?….didnt think so, punk. bwahahahaha
The Wall on March 19, 2009 at 3:49 PM
Yep. Not worth the grief. If the rules keep changing, it’s hard to play the game.
lorien1973 on March 19, 2009 at 3:50 PM
What pisses me off even more is the congress clowns trying to intimidate people at these hearings. Insulting people at these hearings.
You are an elected official, a nobody, damn it. You serve the people.
Term limits. Term limits. Term limits.
How much do these reps cost us in their expense accounts? Their bloated staff? Their “fact-finding” missions (yes, the Caribbean is still warm, thanks senator). How much are their pensions and healthcare?
I am so pissed right now.
reaganaut on March 19, 2009 at 3:50 PM
By that mode of reasoning no one would care about a pety murder while OBL is still alive.
“Why are we bothering with some guy who only killed a few people when OBL killed thousands?” For that matter why worry about OBL who only killed a few thousand when Stalin and Hitler killed millions? For that matter who did we ever worry about Stalin and Hitler when Mao killed tens of millions?”
Now that the AIG bonuses to economic evil doers appear to have been taken care of, instead of being defended to varying degrees, or made so light of, maybe more fire can be concentrated on the bigger fish and maybe the AIG bonuses to economic evil doers can be used as a detonator to blow up a few birds like Dodd and maybe even set of a daisy chain.
MB4 on March 19, 2009 at 3:50 PM
CNNMoney has the list of hundreds of banks that received bailout funds.
This bill will place a 90% tax on almost every major bank in the country.
faraway on March 19, 2009 at 3:50 PM
As surreal as this is becoming, I almost expect the ACLU to challenge the constitutionality of this joke.
Patrick S on March 19, 2009 at 3:50 PM
Bush took the economy back today….
Barry and Dubya have “joint custody” when Daddy Warbucks messes himself Barry gives him to Dubya….
sven10077 on March 19, 2009 at 3:51 PM
Another Lefty willingly walking into slavery.
When Congress decides it can single out a tiny group of Americans to punish in such a Draconian way (90%) and Americans not only accept the action, they cheer it… they will realize that the Constitution limits nothing.
Work the percentages on the vote… a majority of GOP opposed… a massive Democratic vote supported to single out Americans for individual punishment. For fun compare the votes in the Senate and House for The 1964 Civil Rights Act (hint: that time a greater percetage of Republicans 80-82% voted yea than did the Dems 61-69%… one nay voter is still in the Democratic caucus).
The Dems want to tell you where to live, when (and IF) you can go to the doctor, What you can eat, what you can drive, where you can work, what you can do with your money, how much of your money they get to spend, what color skin gets advantages, how to raise your kids, how much you can leave for your family, etc… and you walk into that slavery with eyes wide shut.
You gotta have a vice of some kind you want validated by society… Your apologetics for the incompetent and corrupt Democratic Party can only be explained by some need to exercise your personal guilt. You can’t honestly believe that Marxism works.
mankai on March 19, 2009 at 3:52 PM
The old slippery slope argument of last resort.
MB4 on March 19, 2009 at 3:52 PM
David Kravitz, a liberal appellate lawyer who clerked for Justices Breyer and O’Connor, says this super-tax is likely a bill of attainder. Now, Kravitz says this isn’t a slam-dunk case, as the courts haven’t written often on Article 1, Section 9. But if even a liberal lawyer thinks this tax is constitutionally suspect, the victims probably have a decent basis for litigation.
paul006 on March 19, 2009 at 3:52 PM
Obama owns all this…now he needs to shut up with blaming the previous administration.
becki51758 on March 19, 2009 at 3:53 PM
Dow at 7400 in a deep recession is pretty good.
getalife on March 19, 2009 at 3:53 PM
Nancy doesn’t want to enforce FEDERAL LAW and she wants to rape the constitution to tax individuals a different tax rate…am I getting this right?
If You Chase A!
HornetSting on March 19, 2009 at 3:53 PM
I would just assume that only the mentally impaired could willingly create legislation like that, so I jump for the evil explanation, but I understand the view.
John_Locke on March 19, 2009 at 3:54 PM
for a party that wets itself over collateral damage the donks just levied a huge case…
sven10077 on March 19, 2009 at 3:54 PM
Really? then please explain to me, under current Tax law, how this works?
Bonuses ARE taxable income. There is NO seperate line item on a W-2 for income from Bonuses if you got TARP funds.
So, under law, those bonuses will be dealt with as Taxable income.
Anyone got a link to the actual Bill? I’ll bet this little problem is not addressed.
Romeo13 on March 19, 2009 at 3:55 PM
This should tell everyone a few things. First, never take a bailout, two, don’t do business with the federal government. How does anyone think government contractors feel about this? imagine, “hey, I looked at your balance sheet and you have a bunch of cash and I think we’ve paid you enough, so we’re not paing any more of your invoices”.
This precedent will have ugly ramifications.
booter on March 19, 2009 at 3:55 PM
Oh look. Once again, someone who wants to take an internet dispute to real life.
MadisonConservative on March 19, 2009 at 3:55 PM
how’s your portfolio’s “profit and earnings ratio” fella?
sven10077 on March 19, 2009 at 3:55 PM
Dow at 7400 in a deep recession is pretty good.
getalife on March 19, 2009 at 3:53 PM
you don’t come here to have a cogent debate, do you…
booter on March 19, 2009 at 3:56 PM
This is so Atlas Shrugged. Old fiction repeated as modern farce.
PersonalLiberty on March 19, 2009 at 3:56 PM
And the Dow drops another 30 points on that news.
LegendHasIt on March 19, 2009 at 3:56 PM
They won’t, no one will… We’re being led to our destruction by a Parliament of Whores.
jasetaro on March 19, 2009 at 3:57 PM
Mind your business.
getalife on March 19, 2009 at 3:58 PM
They pass legislation explicitly permitting the bonuses, then they try to break the employment contracts. Now they try to just confiscate all of it.
The only ironclad contracts under Democrat rule belong to unions. Cheer up! When Republicans are back in power they’ll have precedent for breaking the UAW contracts that are choking our auto manufacturers. After all, we own them now, right?
obladioblada on March 19, 2009 at 3:58 PM
This is Congressman. They never read anything they pass. This piece of cr*p is asinine. As you point out there is no separate itemization of the bonus. And many of the AIG employees involved are in the UK company and not subject to US tax law.
Typical congressional stupidity. Another kneejerk faux-outrage law passed without thinking. This country is is fine hands.
johnsteele on March 19, 2009 at 3:58 PM
This whole mess is utterly infuriating.
This corrupt congress spends my hard earned money like Eliot Spitzer in a whore house, and bounce around the word trillion like it’s nothing, only to turn and play at being outraged at some contractual bonuses that THEIR man (Dodd) allowed to be paid in the first place.
The American people had better begin to wake up, because when the government turns on a dime to target SPECIFIC INDIVIDUALS we are all in danger. Today it is the stereotypical corporate execs that everyone is so fond of demonizing, but tomorrow…?
Daddy-O on March 19, 2009 at 3:58 PM
I credit Barry with fixing the economy. – Getalife 3/10/09
Does that mean we are in the second Obama recession?
lorien1973 on March 19, 2009 at 3:59 PM
Just looked at the text of the bill…. this is a straight ADDITIONAL TAX on the Tarp bonus money…
It does NOT say they also do not have to pay regular income tax on this money.
Ergo, as written, their tax rate will be 90% AND their standard Tax, and Soc Sec, and STATE TAX, on this pool of money.
Romeo13 on March 19, 2009 at 4:00 PM
Yes, yes, let me taste your tears, getalife!
Mmm, your tears are so yummy and sweet.
Mmm, yes, the tears of unfathomable sadness!
MadisonConservative on March 19, 2009 at 4:00 PM
The Dems are working very hard to prevent this from ever happening again. You may have already participated in the last almost-free election in your life.
johnsteele on March 19, 2009 at 4:00 PM
believe me I do….
Capitalone was pleading with me not to cancel my account….
I congratulated them on their lobbying and said “see you after the implosion the AIG mess is causing”…..
sven10077 on March 19, 2009 at 4:00 PM
You left out the bwahahaha part of the quote which shows I was joking. ooooopsy on you.
The Wall on March 19, 2009 at 4:00 PM
Sieg Heil a phrase, which means “Victory Hail” or “Hail Victory”. During the Nazi era, it was a common call at political rallies. . .
diogenes on March 19, 2009 at 4:01 PM
Does the IRS now have to rewrite the 1040 to add a line to ensure that less than 200 people pay their proper taxes?
rw on March 19, 2009 at 4:01 PM
when the powers that be preclude change by ballots they have agreed to have power changed by bullets.
sven10077 on March 19, 2009 at 4:01 PM
Obama’s on the phone asking for his DVD’s back as we speak.
BakerAllie on March 19, 2009 at 4:01 PM
The NEW AMERICA knows no privacy.
Publish your name, your income and your portfolio!
mankai on March 19, 2009 at 4:01 PM
No, we went from a bush depression to a deep recession.
Still an inherited economic disaster.
getalife on March 19, 2009 at 4:02 PM
Riiight.
MadisonConservative on March 19, 2009 at 4:02 PM
This is the beauty of the crappy precedent that these idiots in congress created. They didn’t target a single individual or individual corporation. The targeted “…bonuses paid to employees with family incomes above $250,000 at companies that have received at least $5 billion in government bailout money.” Therefore, this loophole bill is not unconsititutional resulting from bill of attainder. It is most likely unconsititutional based on ex post facto.
DoS_Conservative on March 19, 2009 at 4:02 PM
No they can simply add in a new version of the AMT…a tax authored by Ted Kennedy targeting 300 families back in ’68…
sven10077 on March 19, 2009 at 4:02 PM
LMAO! :) :)
HornetSting on March 19, 2009 at 4:02 PM
Liberal interpretation: I don’t know what that means because I’m only in high school, posting on a website on my mommies computer in her basement.
Knucklehead on March 19, 2009 at 4:03 PM
This is an Obama Gold Rush. Great Basin Gold (GBG) went up 13.04% just today.
Got Guns? Got Gold?
MB4 on March 19, 2009 at 4:03 PM
So, Bush depression means the Dow drops to 9000.
Deep recession, which you imply is better, means the Dow drops to 7000.
Ummm…okay?
MadisonConservative on March 19, 2009 at 4:04 PM
That’s not how it works.
At worst, you’d do this:
Bonus * .10 (for the 90% tax) = money received
Then you’d take income taxes from the ending number “money received”
But that’s double taxation; which is illegal as far as I know.
There is a way, in any accounting program to delineate bonuses/dividends and apply taxes to them at a different rate. That’s how it’d work. It’s not difficult.
So, it’s not a 139% tax rate, as previously stated. It’s about a 93% tax rate (or so, I didn’t calculate) assuming income taxes are also taken out after the 90% tax is calculated.
lorien1973 on March 19, 2009 at 4:04 PM
So, does this mean that Chris Dodd and Barack H. Obama have to return their political contributions from AIG?
Inquiring minds WANT TO KNOW, NOW!
HornetSting on March 19, 2009 at 4:05 PM
2005… “ECONOMIC DISASTER IS COMING” – Republicans
2005… “ALL IS WELL, YOU RACISTS!” -Barney Frank and the Dems as they blocked measures to bring oversight to Freddie and Fannie.
mankai on March 19, 2009 at 4:05 PM
So you “being right more than Rush” doesn’t include when you credit Obama with fixing the country after 40 days or so?
Gotcha! Excellent.
But I agree with your premise. Barry made things go from bad to worse. You are on a roll! Keep it up.
lorien1973 on March 19, 2009 at 4:05 PM
This is a completely idiotic bill. School children could do better. Embarrassing.
pugwriter on March 19, 2009 at 4:06 PM
+100
HornetSting on March 19, 2009 at 4:06 PM
Can we tax John Potter’s $135,000 bonus as Postmaster general because the US Postal Service has been losing money hand over fist under his watch?
cadams on March 19, 2009 at 4:06 PM
Absolutely.
Bernanke just killed the dollar and guaranteed an Inflationary Depression and the Craven Criminals on Capitol Hill are playing populist politics over a lousy hundred million to distract the Stupid Nation.
What a bunch of clowns we have running this country (into the ground) by our two Stupid Evil Parties.
They all need to be run out of town on a rail (save one or two).
Thomas Jefferson: “Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper.”
Rae on March 19, 2009 at 4:06 PM
So the Obama recovery you declared last week is over?
Chuck Schick on March 19, 2009 at 4:06 PM
Back on topic, why did so many gop vote yes?
getalife on March 19, 2009 at 4:06 PM
How will this help Michelle’s children?
HornetSting on March 19, 2009 at 4:07 PM
That’s rich. Really.
HornetSting on March 19, 2009 at 4:07 PM
No, I like this thread and it should be continued…where you admit that Barry has made the economy worse since he’s been in office.
It’s a valid point; and important for people to remember this.
lorien1973 on March 19, 2009 at 4:08 PM
Because they’re all a bunch of witless fuckers.
LimeyGeek on March 19, 2009 at 4:08 PM
A majority voted “no”… how did the perectages work out on the other side of the aisle?
mankai on March 19, 2009 at 4:09 PM
Why did all democrats, but 6, vote yes?
lorien1973 on March 19, 2009 at 4:09 PM
Because they are tools….just like ALL dems.
The Wall on March 19, 2009 at 4:09 PM
Excuse me, but you are incorrect.
As someone who as both an employer paid bonuses, and as an employee received bonuses, it is straight compensation and taxable income.
Its treated just like salary as far as the IRS is concerned.
There is nowhere on the Tax forms to Say… well, this is from TARP stuff… or non tarp stuff… its just income as far as the IRS is concerned….
and … go read the bill.
It does not say this is in place of standard taxes, it just ADDS a 90% Tax. It does NOT exempt this bonus money from standard TAX! IT ADDS TO IT!
Romeo13 on March 19, 2009 at 4:09 PM
Turbo Tim just admitted Dodd was right. The Treasury Department asked him to put the Bonus loophole in the Stimulus Bill.
kingsjester on March 19, 2009 at 4:09 PM
When you tell lies so bad your own party is forced to correct them, you might want to rethink your strategy:
Chuck Schick on March 19, 2009 at 4:09 PM
I think they kept it from collapsing and now trying to get it going.
It will, later this year.
getalife on March 19, 2009 at 4:10 PM
If they can retroactively get back money paid to employees from retention bonuses by doing this mob rule thingy and the fake outrage, our country is gone.
The Wall on March 19, 2009 at 4:10 PM
Comment pages: « Previous 1 2 3 4 Next »