this is all smoke being blown by Obama to obscure the real bad guys: the fed and the bankers who run it.
I apologize for not reading through the entire thread, but has it been mentioned that Obama has stated publicly he's not sure if he will support this bill? So why is it being referred to as Obama's plan? Also, I thought I heard someone in Congress state that it would never be more than 100%, and I doubt they'd let that happen anyway. Finally, I thought it was a bad idea to retroactively tax bonuses in the first place, but to make the number of people affected this broad seems absurd (if I'm understanding the proposal correctly. You make a large portion of your money from bonuses?
What is your Constitutional authority for that statement? The validity or invalidity of contracts is generally governed by state law, not the Feds. Even when it is a matter of Federal jurisdiction, it is the courts, not the legislative branch that makes the determination. The only exception to this that I know of is the Bankruptcy Code. Of course, the Constitution empowered Congress to enact laws regarding bankruptcy.
That is kind of irrelevant. If you made $200,000 a year and got a $50,000 bonus, your tax on that bonus is now $45,000. That is almost 20% of the total annual income, and that is before calculating the normal income tax on the rest of the income. It's wrong...period.
How is it irrelevant? mateo said he was completely ****ed if this goes through. Like I said, I haven't looked closely at the details, but since you're already paying taxes on it the total loss would be only $30,000 or so. To me that doesn't sound like "completely ****ed" and certainly not a reason to quit your job to be a stay at home dad. My question wasn't trying to make the point that it's ok. I was just wondering why mateo felt like it would hurt him so badly.
Millions of workers were screwed by AIG? are you saying AIG is the cause of this downturn? Its one thing to suffer when your company's profit falls, or just flat go out of business. Its quite another for congress to create a new tax specifically targeting you retroactively. Its almost like saying its ok to torture because they are terrorists.
Part of the bailout should have been "No bonuses for AIG employees"...however, that would open up a hornet's nest of lawsuits from people at AIG.... Therefore, this tax accomplishes the same thing, but in a more efficient manner. Truthfully AIG would be smarter to not get the money and give it back to the government making it closer to getting out of debt. DD
So now you open up a hornet's nest of lawsuits from many companies instead of one. And AIG is never paying the money back (neither are Citi nor the automakers). It's way too much. The point of the loans for AIG was not to get back to profitability, but to permit and orderly winding down.
According to Bernanke and Geithner, an AIG bankruptcy would have been disastrous for the economy. It would have been like Lehman all over again. And there are a lot of companies in trouble (say, on the verge of bankruptcy) who decide to pay retention bonuses so their smartest people don't leave to profitable companies. While I think it's really unfair in the AIG case to give these people bonuses, passing a blanket bill covering so many companies is stupid.
For many bankers and traders, bonuses are usually more than half of the total compensation package. As you get higher up in rank in the company, your bonus becomes an even larger percentage of the total package.
Only companies that got bailout money......any company that didn't is free to bonus as many people as they like. DD
Yup. AIG is a big cause of the downturn. Just think of what that $150 billion could do for all of us. That's a $150 billion drain on the economy. AIG's troubles reverberate through out the economy since AIG is so massive many many workers depend ona solvent AIG. Whether it's because AIG is a vendor, a client, or owes them money. AIG's troubles was a big part of the scare that froze credit markets, crashed the stock markets, and scared consumers into not spending - so yes, they have a hand in this mess. And your analogy doesn't make sense. It's like saying it's ok to interrogate me instead of interrogating a terrorist. that's what you are actually advocating. But at the end, why should i be taxed to pay for the luxuries of AIG employees? Explain how that is fair? Why are you willing to be taxed to pay for someone's boat? Can you tell me that?
This does not sit well with you. Understandable. You want some kind of punitive effect. That is human nature. So you want the government to take out on middle managers that had little to no impact on the decision making that caused the trouble rather than on the CEO and Board of Directors. That is dumb. That is reactionary. That is the type of "scratching the surface" logic that politicians are absolutely depending on. Congrats.
All this is going to do is cause the really bad banks (i.e. Citi and BofA) to fail. The banks that can afford to give back the money will because they won't want to deal with this nonsense anymore and it will isolate the banks that can't afford to pay it back, causing them to fail because no one will have confidence in them anymore. I'm sure MS, GS, and JPM are lining up investors right now for a private investment to replace the capital because it would be impossible for them to continue being operational with this kind of compensation structure. There would be a mass exodus to foreign banks and investment banks such as Lazard, Jefferies, Moelis, and other major middle market/boutiques.
AIG is the cause for the downturn? The crashing and burning is here because we had a huge credit bubble, we were doomed to have this downturn whether AIG was doing CDS or not. I can list at least a dozen others played a more important role in this. To say AIG is one of the main causes for this downturn is pretty idiotic. Stop pretending to be an expert in the subject after reading a couple news articles. And the analogy does make sense, just because there is public outrage, doesn't mean you should re-write the rules to target a specific group of people retroactively. Its not about what's fair, but what are the rules. Right now they are targeting AIG, tomorrow they might go after you or me, I sure don't want to go down that path.
And how are you going to convince the private investors to take TALF money when the possibility of 90% tax rate looms.
Not at all, I want the top executives to get pissed off and leave and open up spots for the middle managers to come in and fix it. You have to root out the problem before you get a fix for it. I would be seriously interested in how many people here have been or are a top level executive? Because most people that have understand that they are wearing a target and if they underperform they are canned......and that is not a big deal, it is why they score the long dollar in salary. DD
This is not the plan being floated on news programs this morning. I posted this in another thread: Spending the extra trillions is part of Obama's plan to change America. There is no stopping it, so get on board. To fund his budget, the country must raise taxes. That's why I am proposing a 100% tax on money earned over the $5 million income mark with no shelters of any kind. People earning $40K or less would not be taxed. From $40K to $100K would be taxed at a flat 10%; from $100K to $250K at 15%; from $250K to $500K at 20% and $500K to $5M at 25%. Corporate top pay should be no more than 250 times the amount paid to the least paid full-time employee (full-time employee being defined as one who works 20 hours or more). All gaming, prostitution, tobacco and pharmaceuticals, including alcohol and mar1juana, should be legalized and taxed. Let the taxin' begin. By the end of Obama's first term, Americans at large may be grateful if they can secure the terms of my plan. Obama may well declare a further economic emergency to tax all income over $250K at 90 to 100%. I've positioned myself to say okay to that, so "Gobama." Remember, Messiah, I'm on your side.