House Passes Bill to Punish A.I.G. Bonus Recipients

[MannyGoldstein]

Source: The NY Times

Spurred on by a tidal wave of public anger over bonuses paid to executives of the foundering American International Group, the House voted 328 to 93 on Thursday to get back most of the money by levying a 90 percent tax on it.

The measure easily surpassed a procedural hurdle requiring a two-thirds majority vote, thanks to considerable Republican support. The Senate will consider a roughly similar measure, perhaps next week. If something is approved in that chamber the House and Senate versions would have to be reconciled, so prospects for final passage of a bill are unclear.

But there was no doubt after the House vote that the lawmakers were keenly aware of their constituents’ anger.

“The people have said ‘no,’ ” Representative Earl Pomeroy, Democrat of North Dakota, shouted on the House floor. “In fact, they said ‘hell no, and give us our money back.’ ”

Read more: http://www.nytimes.com/2009/03/20/business/20bailout.html?hp

---

Actually, the tax is on the individuals, not on AIG itself - that's a good thing.

[bluestateguy]

1. On to the Senate!

Oh.

[MannyGoldstein]

3. Is That A Picture Of AIG's Bank Account?

I think I recognize that event horizon.

[yodoobo]

2. 11% too low.

Next they'll just bump up the bonus by an amount 10x so that they still get the same net.

Make it 101% so that criminals who receives bonus's only get punished.

Anything less than 100% will just be worked.

[RantinRavin]

4. This will wind up in the courts

and wind up costing 10x's the amount of any recovery.

[MannyGoldstein]

7. This Should Pull In Billions

I've seen high legal fees, but not *that* high!

[wackywaggin]

11. Just what I thought

another boondogle for the attorneys, who unfortunately most of congress is occupied by.

:smoke:

[aquart]

26. Lotta attorneys been laid off. Think of it as a job program for them.

Let's get our people working again!

[demo dutch]

49. Nothing but fake outrage by congress

[Waiting For Everyman]

24. Which exec would be stupid enough to sue?

They're already getting death threats. Suing to get this money back in court would be even dumber than taking it in the first place... Dumber than being dumb enough to cause the meltdown, to need it in the first-first place.

Brainiacs. Let's outsource them to India! :sarcasm:

[Synicus Maximus]

44. Actually if they don't get the bonus

and sue they could get up to twice the original bonus.

http://www.connpost.com/breakingnews/ci_11933577

[bluestateguy]

25. "John Roberts can make his ruling. Now let him enforce it"

Sincerely,

[Belial]

5. This is one of the stupidest things I have seen in a long

time.. First the senate passes a bill so that they WILL get the bonuses.. then when they get busted they take it away? Nice.. Wonder if they can get some of that $90 Million they paid as a bonus over at Freddie and Fannie?

[MannyGoldstein]

8. It's (Allegedly) On All Firms That Got > $5 B in Bailout Cash n/t

[Igel]

52. Of course.

Just like Dodd had nothing to do with the inserted language, then he did, then it turns out Geithner made him do it, except that Geithner says it was during staff-to-staff negotiations.

I'm so glad the grownups are in charge.

I really want to see the bill's language, to see how they're going to distinguish between regular income and the bonus--esp. for those with bonuses of $1k, and the bonuses for the managers who opted for $1 in annual salaries in exchange for keeping their bonuses. That's a different kettle of fish.

Will *everybody* now have to distinguish between salary/wages and bonuses? Just those making over a certain amount per year? Those working for companies that got sufficiently bail-out loans? (And would that include autoworkers?)

Do I trust them to get it right so that it doesn't cost the non-guilty a lot of money? No.

[LisaM]

6. I do think it ignores a larger issue - how people get paid

It's been made pretty clear that this bonus structure comprises pay the employees count on but that either shows up on the balance sheets a different way, or that is taxed differently. It's this kind of thing that drives the income disparity. Wall Street has a large number of people who count on these bonuses as actual income. I'm not defending it - I'm glad it's been exposed.

[sir pball]

54. Yeah, I agree.

The way I understand it it's dirty trick so the company can inflate their estimates since the bonuses aren't projected payroll and therefore an "unexpected" expenses.

It definitely shouldn't be tolerated, but in the end it's more "creative accounting" than using taxpayer money for *unnecessary* handouts and I'm ambiguous at best at the idea of punishing the recipients of the money (I heard something like the average payout was a million and change which yes, is still an awful lot of money and should be healthily taxed but I don't personally find it an utterly disgusting compensation for that line of work).

[EFerrari]

9. But the people who engineered this get off? Is that right?

[acmavm]

10. They should not be getting a damn dime. If I fail, if I lose my

company money, I'm gone.

Oh wait. They didn't fail, did they? They got OUR money!

[JDPriestly]

12. They should have simply ordered the employees to delay

taking their bonuses until the company has returned to profitability and paid off the U.S. taxpayers. That would have protected the contract rights of the recipients. Delay in exercise of a right or duty is not the same as denial, and in this situation, delay is reasonable and justified by AIG's financial losses.

I don't understand why they didn't think of just delaying the bonus awards.

[yodoobo]

57. The payout date is no doubt part of the contract

A contract without a deadline is a worthless contract.

[wackywaggin]

13. Does anyone find it disgusting

that instead of solving problems the repigs are more interested in blaming someone for the problems they created.

:smoke:

[LakeSamish706]

14. Thats good news... Would like to know who the 93 were that voted against it... n/t

[JDPriestly]

15. They can challenge this in the courts if they wish, but I heard that most of the

money to the AIG guys has been paid to them in the UK, so how do we collect the taxes on it? I don't know much about taxes. How does that work?

[MannyGoldstein]

16. That's A Very Good Point n/t

[MaineDem]

17. Why don't they just say "If you forego the bonus you keep your jobs."

There are plenty of smart money people unemployed right now who would work for AIG.

[WCGreen]

18. To be fair, I wish they had only sought 81%...

Why, because that is how much of AIG we as tax payers own. If the company wants to give these boobs a bonus, it shouldn't be up to the government to say otherwise.

Not one penny in bonus on my dollar.

[woodsprite]

19. Seems better than a sternly worded letter from Conyers. n/t

[jody]

20. I want to punish the elected and appointed bureaucrats that let this happen. We fire senior

military personnel when they screw up, e.g. six nuclear warheads were mistakenly loaded onto a B-52 and flown from North Dakota to Louisiana on Aug. 29-30.

Why aren't the guilty being fired in this case?

[nc4bo]

21. Exactly. The bonus money is only a tiny tip of the iceberg. Why stop at the bonus takers?

or are they really scapegoats?

I think the bonus takers are a big deal but the buck doesn't stop with them, it stops with the ones responsible for the mess.

If our government would only go after ALL wrongdoers (including our very own war criminals) with the same sense of immediacy and righteous outrage, this country would truly be on the path of recovery.

[formercia]

22. Almost.

[grahampuba]

23. Bonuses due to contract, wtf about Pensions?

Great, when they got hired to leech they had a contract that stated something about bonuses, which AIG is legally obligated to honor.
how can the pensions of thousands be destroyed with a penstroke without no penalties then?
im not exactly an Econ major, but i really cant wrap my head around that one.

[aquart]

27. It's really very simple:

It's never legal to take money from a rich man.

It's always legal to take money from a poor man.

[formercia]

28. Now I can get back to my life.

This solves everything.....

[formercia]

29. House passes bill taxing AIG and other bonuses

Source: Yahoo Finance


House passes bill taxing employee bonuses at AIG, other companies with big bailouts





WASHINGTON (AP) -- The Democratic-led House overwhelmingly approved a bill on Thursday to slap punishing taxes on big employee bonuses from AIG and other firms bailed out by taxpayers.
House Minority Leader John Boehner of Ohio gestures during a news conference on Capitol Hill in Washington, Thursday, March 19, 2009. (AP Photo/Evan Vucci)

AP - House Minority Leader John Boehner of Ohio gestures during a news conference on Capitol Hill in Washington, Thursday, ...

The vote was 328-93.

"We want our money back and we want our money back now for the taxpayers," said House Speaker Nancy Pelosi, D-Calif.

The bonuses, totaling $165 million, were paid to employees of troubled insurer American International Group, including to traders in the unit that nearly brought about the company's collapse.

In all, 243 Democrats and 85 Republicans voted "yes" on the bill. It was opposed by six Democrats and 87 Republicans.

Read more: http://finance.yahoo.com/news/House-passes-bill-taxing-AIG-apf-14692580.html

---

Close the Barn Door, Mabel!

[Orrex]

30. I have a really dumb but honest question

How is this not a bill of attainder?


And, if it is not, why can't we just pass a bill that drafts all of the Blackwater employees into actual, accountable military service?

[burythehatchet]

33. It is nothing but congressinoal monkeys putting on a show for a gullible public

[Orrex]

34. So... business as usual, then?

I should have known.

[burythehatchet]

36. I'm still waiting for one of them to ask about AIG's counterparties, but before

that happens I believe one of them will come on CNN and throw their poo.

[jmowreader]

43. I was about to post the same thing

I hope there's someone smart over there who can figure out a way to make what very clearly LOOKS like a bill of attainder into something that isn't quite a bill of attainder even though the intention is for it to be one.

If this bill has "AIG" anywhere in it, any Regent University L2 could get it overturned in about ten minutes, because it's screamingly unconstitutional.

[burythehatchet]

31. Proving once again that government is broken and congress is useless

Their new law won't make it past the county court.

[Po_d Mainiac]

37. But then the monkeys can demand repayment of the attorney

fees spent suing those of us that bailed their shitty asses out. I'd rather see the RICCO statutes implemented and go back the full 5 years!

[formercia]

41. I want to see them go down for insurance fraud

selling worthless policies that the taxpayer has to cover.

[Junkdrawer]

32. Good luck taxing the British managers of AIG....

Wow, I feel better already... :sarcasm:

[formercia]

35. I had wondered about that

Obviously, Congress has that figured out already. :rofl:

[superconnected]

38. Better than nothing.

[Gin]

39. did the Senate vote on this too?

[Juan_de_la_Dem]

40. How can you pass a retroactive tax?

[KakistocracyHater]

45. the same way they went

with the War Crimes Act?




Just do it ?

[demo dutch]

47. You can't -- Constitutional Law 101

[Igel]

53. I think that's not a big problem.

They're altering the tax code for 2009. Strictly speaking, none of the taxes are due until 2010, and the entirety of the income for 2009 would be covered.

If they wanted to play with the tax code's structure for 2009, they could. The only reason to pay weekly/monthly (etc.) is to avoid penalties and interest for not paying properly in installments. Taxes for when these bonuses are paid aren't due yet.

If nothing else, it would have to go to court. I suspect Congress would win this one. Or, rather, the US government (viz. the administration) since the Congress really can't be held accountable in any way other than political.

[Mr. Sparkle]

42. more than half of the Taliban Party voted against it .... interesting!

[demo dutch]

48. because it's unconstitutional. the whole thing is nothing more than fake outrage

[Hugin]

51. Well then... Consider it a 'fee' to use Public Money for Private Gain.

If that's more palatable.

[demo dutch]

46. Sounds unconstitutional to me, you can't enact a law after the fact.. Constitutional Law 101. It's

nothing more than fake outrage!!!

[MannyGoldstein]

50. Believe It Or Not, Retroactive Taxes Have Been Done Several Times

Last on was under Clinton. I believe that SCOTUS said it was OK for some reason.

[mr_smith007]

55. THIS IS GREAT!

This is a down payment on the law being laid down by the new sheriffs in town. The symbolism is fantastic and long overdue. I doubt this will last long in court, judges hate to touch congressional tax issues. Pelosi is my hero and her leadership has done nothing but good since 2006. She converted me from freeperland in 06 and the liberation since then has changed my life for the better!

[pinniped]

56. 10% of something is still better than 0% of nothing.

These so-called people that seem to be important now didn't have a say in giving them over 170 billion.

Morons.