AIG executive resigns on NY Times op-ed page

[Generic Other]

CHARLOTTE, N.C. – An American International Group Inc. executive who received a bonus worth more than $742,000 after taxes has resigned publicly — in an Op-Ed column in The New York Times.

Jake DeSantis, an executive vice president at AIG's Financial Products division, said Wednesday he's leaving the company and will donate his entire bonus to charity. The letter, addressed to AIG's CEO, Edward Liddy, criticized Liddy for, among other things, agreeing to the payments but then calling the bonuses "distateful" as he testified before disapproving members of Congress.

New York-based AIG has been criticized for awarding $165 million in bonuses to employees of the financial products division, a global unit at the root of AIG's downfall.

Since September, AIG has received a $182.5 billion federal bailout.

http://news.yahoo.com/s/ap/20090325/ap_on_bi_ge/aig_resignation_letter

My tax dollars at work! He gets my money and then he also gets a tax break for donating it to charity.

[Tesha]

1. Money that you received as "income" and then donate to charity has no effect on your taxes.

At the moment, if you receive $1 (or $1 million) as income
and then donate the entire sum to charity, that money has
*NO EFFECT* on your taxes for good or for bad; it's as though
you never received it at all (+/- some details). So nobody is
getting away with tax advantages by donating the bonus to
charity as compared to returning it.

In the future, this may change. Obama has been talking about
*LIMITING* the tax-deductability of charitable donations for
persons with very high income. If that were to become law,
our hypothetical AIG executive should definitely return the
bonus rather than donate the bonus lest lest they end up
paying taxes on a portion of the bonus even though they
kept none of it.

Tesha

[Egalitariat]

2. Isn't there a limit (like 50% of your AGI) of how much you can write off?

I'm pretty sure he'll have income of $1 million, but he'll only be able to write off $500,000 as a charitable contribution. Therefore, he'll pay taxes on $500K.

Also, if he's subject to the AMT, his write-offs basically disappear altogether.

[Tesha]

4. Yes. I hadn't considered that since my "capacity" never approaches 50% of my AGI.

But assuming that the bonus-to-charity actually does exceed 50% of the
AIG guy's AGI, that only strengthens my case that he's not screwing anyone
via his taxes by donating the bonus.

Tesha

[indepat]

3. Don't let the effing door hit you in the effing ass

:P