Skip to comments.House passes bill taxing AIG and other bonuses (HR 1586: Tax 90% over $250,000)
Posted on 03/19/2009 12:10:57 PM PDT by ConservativeMind
Acting with lightning speed, the Democratic-led House has approved a bill to slap punishing taxes on big employee bonuses from firms bailed out by taxpayers.
The vote was 328-93.
(Excerpt) Read more at breitbart.com ...
Once more, the administration has won the PR war. How many people will ever know it was Obama and Geithner who inserted the bonuses into the stimulus bill and the GOP senators never had a chance to read the bill and identify things like this that were in there?
“So in the eyes of Congress and, unfortunately, a great many on this board convicted drug dealers have more Constitutional protection that a bunch of insurance executives?”
Yes. No due process for unpopular businessmen.
This will be tied up in court for years to come and will end up costing the tax payers many times over the cost of those bonuses.
I am waiting to see a list of Republicans who voted for this.
Your position is correct. As much as I find the AIG bonuses to be extremely distasteful, passing a law that essentially imposes a retroactive tax is extremely dangerous as it establishes a precedent that could be followed in the future to increase government revenues.
How would people feel if this law were one day cited to levy a tax on their lawfully gain incomes from some past period?
Lord knows the GOP does some pretty stupid things, but what are they supposed to do?...this is the House remember, they face re-election in 2010...the polls show that an overwhelming majority of Americans want this money taken from AIG. The least thing we should do is make it tougher for the GOP to get elected...the bill is going to pass no matter what in the House, let the Repubs have some electoral cover-I know that many of you are bent on principle over electoral politics, but consider...if we had a few RINO’s , Barney Frank would not be head of this committee.
Yes, I believe you are correct now that I think about it. At the time, there was a lot of chatter about the deal that Warren Buffet got and many people were wondering if the Fed got the same terms (that Buffet got). It was some type of preferred stock arrangement.
Now, THAT’s a bill I could support!
What has happened to my country?
Are we really this far gone?
AIG issued Preferred Stock directly to the Fed
Jim Jordan (OH) voted for this? I’m so ashamed.
While you're absolutely right, No bailouts would have been necessary if the SEC hadn't handed the fraudulent naked shorters the banking industry in the first place...Naked Short Fraud took down Bear Stearns and Lehman in today's Bloomberg.
Oops I take that back.
I keep posting this and saying this too:
Republicans had crafted a piece of legislation that would have taken back 100% of these bonuses. They stated this several times during the course of debate today.
Be wary and Be careful where you place your expectations.
You have literally millions of people in this country reading the news today and, for now very real reasons, realizing that they may indeed have to act, rather than talk. It’s a very scary point in any countries history where action is the only reaction. Very good post, thank you.
I don't give a damn what that failure says on behalf of his good buddies. Were's the contract with the American taxpayer?
"When a business in purchased, that business assets and liabilities are assumed by the purchaser."
AIG is an unsuccessful business. It is a big failure and is so, because of the thoughts, decisions and actions of the clowns demanding the bonuses! They were rescued from bankruptcy by fed gov. What part of that don't you understand?
"Do you not understand the most fundamental principles of business law and practice? Really, this is business 101."
Business law? Here's contract law 101. The party with the greater assets wins the case. Fed Gov to the losers-sue me!
BTW. Conservative philosophy maintains that responsibility for one's acitons is required. That means you don't get cash bonuses for efforts that result in failure.
It most certainly is.
Paging Claire Wolfe .....
How about standing up for principle? What you advocate is the root cause of what we now have in Washington. When elected officials do what they feel is popular, not what they feel is right, it's the people that ultimately suffer.
Yes, I agree. My only additional question would be is "Who's going to have the guts to sue?"
Would you want to bring all that heat upon yourself by suing the Federal government for this "bonus" money in this political climate. It could be literal suicide as AIG is already receiving death threats.
If the sue, they win and it costs the US Taxpayer hundreds of millions more in legal fees. But that is a big "if".
According to Greenburg, it wasn't the contracts AIG held that were all bad rather they had too many contracts to cover when they were required to put up additional equity for the contracts due to the downgrade... all the Fed really needed to do was act as a backup guarantee to AIG on the contracts. Instead AIG received TARP and then funneled the money through to the chute to satisfy equity requirements -- many of which were foreign banks.
Where is the contract with the American Taxpayer...
The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary [of the Treasury] or the designee of the Secretary.
The amendment as modified by the conference committee was included in the final recovery bill passed by Congress and signed by President Obama.
Are you that slow?
Make no mistake about it.
I am skeptical of the Republican party.
I’m the one who constantly says if Republicans behave like Democrats, why do we need two parties?
I have hopes for Jim Jordan to at least uphold the Constitution.
I'm thinkin' yeah.
There's no bill of attainder, because the principles are not mentioned by name. The LAW, since you're grasping at LAW straws is that the bonus money paid for failure, because of the efforts of the WH through Dodd, will end up being returned to the treasury in a LAWFUL manner.
But they won't and can't.
They won't and can't for the same reason the Dems won't and can't.
They are GLOBALISTS. They are thinking internationally. Their primary interest and focus no longer on the well-being of America and the American citizen.
All of them in both parties are culpable of conspiring to ruin American citizens by allowing or encouraging off-shoring of our industrial capacity, importation of cheap foreign, non-citizen labor, kow-towing to the U.N. and “world opinion”.
America needs its industrial base and its jobs back. We need to start buying and using American made products. We need to re-assess all our trade agreements and only continue with those in which AMERICA and Americans benefit.
We need to stop supporting financially people who hate us, whether Saudi Wahhabists or Red Chinese Communists, with our export dollars.
But you will have a difficult time finding ANYONE in EITHER party who supports that thinking.
The facts are that these bonuses were set up in a department unrelated to the credit default swaps group that took AIG under. The people who were getting ready to leave when AIG went under were asked to stay in this other trading department to close out positions without losing money in the process....those that stayed and ‘saved AIG’s butt’ were given ‘retention contract payments’ that Congresscritters are calling bonuses. ie, after these good samaritans saved the world financial system from itself they are being attacked by a class envy strawman (not the facts). The ‘hanging mob’ is alive and well in Congress, hoping that the mob keeps it’s eye on AIG and doesn’t notice them.
I'm thinkin' yeah.
It's clear, he's that slow.
Find me a janitor that gets bonuses, or regular salaried employees with Bonus clauses in their contracts wise guy.
The bonus money did NOT pay for failure. My gawd, you are stupid collapsed in on itself! The bonus money paid people to PREVENT further failure...and those people were NOT the people that got AIG into trouble in the first place!
Those of you in favor of lynching AIG had better think seriously about that. In your zeal to "get 'em" , you may be shooting yourself in the foot.
Just another thought. Your employer, your kids' schools, your favorite mall and other commercial ventures may suddenly find themselves without insurance, and forced to suspend operations, when AIG goes. No one is big enough to take on all of AIG's risk in those markets.
Too bad the Republicans fall for populism over the rule of law. I’m no fan of the bonuses, but the fact is, they were allowed by the stimulus. To say the IRS can now seize them is VERY DANGEROUS.
Personally when I hear the words ‘too big to fail’ I think monopoly. If there is a monopoly...then there is a legal consequence.
If there was to be any bailouts etc. it should have come from the bankruptcy court system. The courts should have never ever been circumvented. Even now, much of this could be stabilized by turning matters over to the bankruptcy courts for reorganization. Congress trying to do this with the tactics their using is fascism in my opinion.
Rally up anger towards these people, they are not trying to save their company, their just running away with our tax money...c’mon. It is all propaganda. The more I watched this today the more I believe AIG is a prop, an excuse, and is being abused as a means to a more sinister end. Poor useful idiots.
You're the one confusing a bad law with contracts.
Eric Cantor voted for this disgusting piece of legislation. He’s no better than the rest of them.
We will all pay for this down the road.
I can guarantee you that many operations staff and finance personnel were offered retention bonuses at AIG. As the previous posters have stated, believing that all this money was paid to 50 people at AIG-FP is naive.
You misunderstood my post. I fully support your position. I was referring to the knee jerks in Congress and on the thread who want to punish AIG for something that the government already controlled and condoned.
I agree that Congress has no business passing any such nonsense.
Republicans better start fighting this administration on something or we’re going to be in a heck of a lot of trouble.
Folks, we have Karl Marx, Jr. as our President. If you can’t be against him on just about every issue, you don’t deserve to be elected.
$200 billion? Try $1.6 trillion (or more) in outstanding liabilities. If AIG goes belly-up, there's going to be more than a foot wound - the sound we'll all hear is that of a sucking chest wound.
You're point is very well made.
Which one would almost think Congress is hell bent on forcing to happen! You said it well, these facts need be told often. The real news was that the $80 Billion in Credit Default Swaps have been closed out and the division that caused the problem is all but shut down! By simply NOT reporting the real news, the media is complicit in this witch hunt (which they are covering!).
Lovely, just lovely.
I am a retail sales manager.
I get a salary
and a quarterly bonus...
When we filed chapter 11 years ago...
I got a bonus to stay on board and work it out.
You can bet they will be hiring some real clever tax lawyers when they do their taxes next year.
LOL! Of course not.
"The bonus money paid people to PREVENT further failure."
Paying bonuses to the folks that caused the failure in the first place is an act of stupidity.
...and those people were NOT the people that got AIG into trouble in the first place!"
Whatever you say...
I am very against the bailout, but this is absolutely chilling!
Liberals don’t pay taxes, just the little people.
The same exact thing happened to my sister-in-law. As I understand it, it is very common in commercial bankruptcy filings, especially in liquidations.
Do you understand that is what these bonuses were?
He doesn't understand and he doesn't care. He just want to "get the man".
I should have been more specific. The $200 billion was in reference to the essentially unsecured TARP money. The policyholder liabilities are protected by the various state regulations and are deemed safe. It is that fact that keeps it out of bounds from Fed seizure in the event of bankruptcy. In short the policyholders are protected and the taxpayers are screwed. I guess that would make the policyholders the next public enemy #1.
I have to really, really wonder if AIG is regretting the bailout.