Hello? There’s an alarm shrieking. Is no one paying attention? The House has approved a NINETY PERCENT TAX for the sole purpose of punishing a corporation whose executives annoy us.
Folks. The federal income tax is not intended to be used as a bludgeon.It may be against the law to use it that way.
This is a disaster for America, far worse than any economic recession could be.
Make no mistake about it. The powers that put George W. Bush in office will be back. This precedent will give them a handy-dandy tool to use against people they don’t like. And who knows? One of those people could be you or me.
That’s the whole issue about the rule of law. It’s supposed to protect everyone, not just people we don’t like.
The Times reports that “Democrats and some Republicans said the tax on bonuses for traders, executives, and bankers earning more than $250,000 was the quickest way to show angry Americans that Congress intended to recoup the extra dollars.”
“Quickest way?” We call that expedience. Another term could be stone stupidity. It’s every bit as stupid and arrogant as the Bushite theory that if a president says something, that makes it legal.
I don’t like AIG’s actions any more than the rest of us do. But that doesn’t justify trashing the Constitution in a fit of pique. There’s gotta be a better way.
This one is going to come back to bite. In a big way.
I’m of two minds on this. One the one hand, if the government taxed away my bonus, I’d be ready to riot in the streets. It just seems like there’s something fundamentally wrong with the government interfering in private companies this way. And the precedent it sets is worrying. (What, I wonder, stopped them from doing the same thing to GMs unionized workers? Tax the heck out of them to make up for the fact that they had to give GM billions?)
On the other hand, these companies did receive a government bailout. Maybe this will serve as a valuable lesson to companies in the future: don’t screw up so badly that you require Uncle Sam’s money, or the government will start sticking its (really big) nose in your business, and you will not like the results.
I am rather dismayed about this massive tax on bonuses. It’s a ridiculous over-reaction. And further proof that our lawmakers have left the rational thought behind and are bent on making huge gestures in an effort at appeasement. Although it is a nice change that they are trying to appease the public, rather than Wall Street cronies…
I suppose I agree that this was not done properly, but….we are 80% owners of that company. I think we’re getting a glimpse of the sense of entitlement and no-consequences that was–and perhaps still is–business as usual on Wall Street.
I think it was a cynical move by congress people to “vote” to punish AIG – it will never be found constitutional and they’re off the hook with their constituents, after all, they voted to punish.
I am a raving liberal, but I heard a conservative (way conservative) Texas Representative (forgot his name) on NPR yesterday who made a number of smart suggestions of excellent ways to get back the bonuses that would be legal and constitutional.
For example, one is to force the company into receivership – since we are 80 percent owners we can do that – and then all assets and payouts up to a year ago can be claimed back. They ignored him. He asked, and I’m wondering too, why this option was not pursued since it would stand up in court? I’m guessing it was a deeply expedient move and they don’t really want to get the money back.
More will be revealed, I guess.
I could not agree with you more. This is unconstitutional and just not good sense. AIG – and effectively us – will spend millions in legal fees and court costs trying to apply this tax, and we’ll lose anyway.
Bad decision.
Wow. I’m ashamed to say that I hadn’t even thought about the ramifications. Guess I’m too distracted.
But you’re right. It’s the whole slippery slope mentality.
I don’t understand why you say this precedence will give he Republicans something to use???? It is a democrat in the WH that is allowing it? Seems to me that the Republicans NEVER went this far.