90% TARP Tax. Update - the Tax May Be "Dead".

[Fern]

Since it's passage yesterday I've received emails from concerned clients subject to the 90% tax. (I'm a tax CPA for those who may not know).

The client I just finished writing back is an analyst responsible for tracking, let's say, the cardboard box industry and the various manufacturers therein.

(S)he doesn't now, and never has been involved in mortgage backed securities etc. No toxic assets whatsoever etc.

Most of their compensation has always been bonus based. Perform, win big, don't and get nothing.

One of the TARP companies recently hired them (2008) to come over to help. This person has a long track record of success in their niche. They lured them over from their previous company with a multi-million dollar sign-up bonus that was paid in the beginning of 2009.

Guess what? They just had the government take it away (unless something changes drastically).

Do you think this top- talent type person is gonna hang around and help us make sure we don't lose our taxpayer investment in these American companies?

I don't.

Penny-wise and pound foollish. Screaming hysterically over $165 Mil may well cost us trillions.

And for those of you that continue to complain that the bonuses are paid out to people who caused the problem in the first place - here's a real life example proving what many of us have been telling you all along - those people were fired long ago and now we're screwing the very people recently brought in to help us. People who had nothing to do MBS and other toxic assets.

Way to go Congress! (golf clap)

I'm guessing many of our best are now looking for positions in non-TARP firms (foreign companies with US operations).

Unbelievably stupid and self-destructive.

Edit: AIG is not involved, and 'cardboard' company is not relevent - I used that as an example. I can't disclose this person private info.

Fern

 

[BoberFett]

There are lots of talented analysts out of work right now. They'll probably work for less than millions. Are you going to claim this person is the only person in the world who can save us? How do you figure? Is there a big 'S' emblazoned on their chest?

 

[daishi5]

Originally posted by: BoberFett
There are lots of talented analysts out of work right now. They'll probably work for less than millions. Are you going to claim this person is the only person in the world who can save us? How do you figure? Is there a big 'S' emblazoned on their chest?

AHH, here we go, the "they should be lucky to be employed" argument. This person left their old job because a company we bought, offered her a bonus if this person would come in and save us hundreds of millions of dollars. Now that this person came in and did the work, were going to take that away from this person.

Seriously, how the hell do you justify this? The american taxpayers own the company that employs this person, we offered to pay them a certain amount if they do a job, they do the job and we write a law to take away their pay?????? You HONESTLY have no problem with this?????

 

[Phokus]

Originally posted by: daishi5

Originally posted by: BoberFett
There are lots of talented analysts out of work right now. They'll probably work for less than millions. Are you going to claim this person is the only person in the world who can save us? How do you figure? Is there a big 'S' emblazoned on their chest?

AHH, here we go, the "they should be lucky to be employed" argument. This person left their old job because a company we bought, offered her a bonus if this person would come in and save us hundreds of millions of dollars. Now that this person came in and did the work, were going to take that away from this person.

Seriously, how the hell do you justify this? The american taxpayers own the company that employs this person, we offered to pay them a certain amount if they do a job, they do the job and we write a law to take away their pay?????? You HONESTLY have no problem with this?????

WHen did we buy AIG? Were the contracts written before or after the company? Either way, the contracts were written in bad faith. The company wouldn't even survive without taxpayer money, nobody should be paid hefty bonuses. And Boberfett is right, these jackasses should be counting their blessings that they have a job in this market. Without the taxpayer bailout, nobody would be employed by AIG now, case closed.

 

[Red Dawn]

Originally posted by: daishi5

Originally posted by: BoberFett
There are lots of talented analysts out of work right now. They'll probably work for less than millions. Are you going to claim this person is the only person in the world who can save us? How do you figure? Is there a big 'S' emblazoned on their chest?

AHH, here we go, the "they should be lucky to be employed" argument. This person left their old job because a company we bought, offered her a bonus if this person would come in and save us hundreds of millions of dollars. Now that this person came in and did the work, were going to take that away from this person.

Seriously, how the hell do you justify this? The american taxpayers own the company that employs this person, we offered to pay them a certain amount if they do a job, they do the job and we write a law to take away their pay?????? You HONESTLY have no problem with this?????

No, not at all.

 

[Fern]

Originally posted by: BoberFett
There are lots of talented analysts out of work right now. They'll probably work for less than millions. Are you going to claim this person is the only person in the world who can save us? How do you figure? Is there a big 'S' emblazoned on their chest?

Where do get your info about how many talented financial sercive types are unemployed?

Is that a guess?

How silly (re: the only person who can save us etc.). The point is that, contrary to hysteria, the tax punished unitended targets.

The good people we need won't put up with this crap; they don't need to. They'll flee the TARP companies; the ones with trillions of our tax dollars. That's stupid, we'll lose our investment, or need to pump in even more.

Congress used an elephant gun to shoot themselves in the foot and we'll pay the bill.

Then there's always our better talent going to work for non-TARP foreign companies with subsidiaries here. How's that any good?

Fern

 

[BoberFett]

Originally posted by: Fern

Originally posted by: BoberFett
There are lots of talented analysts out of work right now. They'll probably work for less than millions. Are you going to claim this person is the only person in the world who can save us? How do you figure? Is there a big 'S' emblazoned on their chest?

Where do get your info about how many talented financial sercive types are unemployed?

Is that a guess?

How silly (re: the only person who can save us etc.). The point is that, contrary to hysteria, the tax punished unitended targets.

The good people we need won't put up with this crap; they don't need to. They'll flee the TARP companies; the ones with trillions of our tax dollars. That's stupid, we'll lose our investment, or need to pump in even more.

Congress used an elephant gun to shoot themselves in the foot and we'll pay the bill.

Then there's always our better talent going to work for non-TARP foreign companies with subsidiaries here. How's that any good?

Fern

The economic crash caused by people who were supposedly talented has cost hundreds of millions of people around the world a lot more than their fat bonus.

You'll have to excuse me if I don't feel we should be paying another round of "experts" to fix things with their economic voodoo. "Talent" is what it's called when some "expert" uses smoke and mirrors to make the numbers look good on paper even if it's a complete lie. Either the problem can be fixed with straightforward GAAP or we're just setting ourselves up for another massive failure.

 

[lupi]

All I got to say about this is Joe Louis.

 

[K1052]

Salaries will just rise to compensate and effectively eliminate any incentive to perform since you're going to get paid the same amount if you save a company billions or just show up for work every day and manage to fog a mirror.

WTG Congress.

 

[frostedflakes]

"May well cost us trillions"? Come on.

That said, the more I think about it this tax does seem rather foolish.

 

[3chordcharlie]

I'm sorry your client lost her bonus.

Perhaps at a time like this, AIG could have come up with a smarter plan than 'business as usual'.

I'm sorry, but the way things are run these days, anyone with a six-week training course could perform as well as the average 'talented analyst'. Maybe there's the odd one who is really better, but the 'million dollar bonuses for all' party was a symptom of the overall financial bubble, not an indication of actual value.

Anyone remember all those brilliant personal financial planners from the late 90's?

 

[bozack]

Normally it is steal from the rich to give to the democratic base...here we have them punishing everyone, even those who had nothing to do with the situation at hand...

Those that think the top talent will work for a reduced price just because are dillusional...

 

[frostedflakes]

Also should be mentioned that the bill isn't law yet, still has to be passed by the Senate and signed by Obama (although I can't imagine either one opposing it, who knows, maybe they'll come to their senses).

 

[JSt0rm]

life sucks sometimes.

 

[Acanthus]

Originally posted by: bozack
Normally it is steal from the rich to give to the democratic base...here we have them punishing everyone, even those who had nothing to do with the situation at hand...

Those that think the top talent will work for a reduced price just because are dillusional...

The top talent can go fuck themselves.

You dont get bonuses for running a company into the ground.

You dont get bonuses from a non-functioning company.

You dont get bonuses directly from taxpayer money.

Dont like it? Dont work for AIG.

In closing, fuck off.

 

[CPA]

Originally posted by: frostedflakes
Also should be mentioned that the bill isn't law yet, still has to be passed by the Senate and signed by Obama (although I can't imagine either one opposing it, who knows, maybe they'll come to their senses).

add, and will have to withstand the multitude of lawsuits based on it's constitutionality.

Fern, I'm with you on this, but I think this thing is going to be in the courts for years and finally stricken down by the Supreme Court.

 

[sciwizam]

I've posted this in other threads, but I'll post again.

For more clarity on who's receiving the bonuses and if they are responsible for the mess and how are they receiving a retaining bonus if they have left the company, here is a clip form the AIG hearing yesterday.

Text

Drag the slider to around 4hrs 22mins and wait till the questions were answered which ends around 4hrs 29min.

 

[Wreckem]

Originally posted by: Acanthus

Originally posted by: bozack
Normally it is steal from the rich to give to the democratic base...here we have them punishing everyone, even those who had nothing to do with the situation at hand...

Those that think the top talent will work for a reduced price just because are dillusional...

The top talent can go fuck themselves.

You dont get bonuses for running a company into the ground.

You dont get bonuses from a non-functioning company.

You dont get bonuses directly from taxpayer money.

Dont like it? Dont work for AIG.

In closing, fuck off.

The Govt should have just let them fail then. Instead of pumping in shit tons of money, chasing all the competent people off, just to see it fail in the end. In the end AIG will fail because no one will want to risk taking a chance and trying to right the company. I still cannot believe the general public is playing into Congress's fake outrage. Its the classic dog and pony show. Distract them over here with something relatively trivial, while raping and pillaging over there while no one is looking.

 

[Hacp]

Originally posted by: Fern
Since it's passage yesterday I've received emails from concerned clients subject to the 90% tax. (I'm a tax CPA for those who may not know).

The client I just finished writing back is an analyst responsible for tracking, let's say, the cardboard box industry and the various manufacturers therein.

(S)he doesn't now, and never has been involved in mortgage backed securities etc. No toxic assets whatsoever etc.

Most of their compensation has always been bonus based. Perform, win big, don't and get nothing.

One of the TARP companies recently hired them (2008) to come over to help. This person has a long track record of success in their niche. They lured them over from their previous company with a multi-million dollar sign-up bonus that was paid in the beginning of 2009.

Guess what? They just had the government take it away (unless something changes drastically).

Do you think this top- talent type person is gonna hang around and help us make sure we don't lose our taxpayer investment in these American companies?

I don't.

Penny-wise and pound foollish. Screaming hysterically over $165 Mil may well cost us trillions.

And for those of you that continue to complain that the bonuses are paid out to people who caused the problem in the first place - here's a real life example proving what many of us have been telling you all along - those people were fired long ago and now we're screwing the very people recently brought in to help us. People who had nothing to do MBS and other toxic assets.

Way to go Congress! (golf clap)

I'm guessing many of our best are now looking for positions in non-TARP firms (foreign companies with US operations).

Unbelievably stupid and self-destructive.

Fern

Why are people paying millions of bucks to someone who analyzes the cardboard box industry? Its a freaking cardboard box.

 

[da loser]

Originally posted by: Fern
Most of their compensation has always been bonus based. Perform, win big, don't and get nothing.

One of the TARP companies recently hired them (2008) to come over to help. This person has a long track record of success in their niche. They lured them over from their previous company with a multi-million dollar sign-up bonus that was paid in the beginning of 2009.

Do you think this top- talent type person is gonna hang around and help us make sure we don't lose our taxpayer investment in these American companies?

so let me get this straight.

this person came over to "help" us because they got a multi-million dollar sign up bonus.

and supposedly if this person doesn't perform, they get nothing.

does any of that make sense?

a)if you get a huge signing bonus, that's not getting nothing. and how is that person's performance tracked to presumably get an even bigger bonus? surely it's based upon long term performance, right?

b)s(he) is not helping us, s(he) is helping themselves. what in the hired gun contract would lead anyone to believe this person will work to help the taxpayer recoup their investment and not just hand out billions to another company, then promptly get another large signing bonus from that respective company? s(he) has already shown $ is king and will go anywhere for it.

c)if that person was so valuable, how come they didn't get that bonus from a quality company, presumably flush with cash because this person is so good? surely that company is in a better position to pay someone of his/her talent than a broke company depending on taxpayer funds just to sell itself off.

other than foreign companies what are the big companies that are exempt from the bailout?

seems like they are all involved. goldman sachs even. so if they're all taxed what are they going to do instead? sweep floors for a paltry million?

what ever happened to duty to your country? you got soldiers dying for a pittance, yet the supposed best and brightest can't even take a paycut for 1 year in the hopes of saving their country, not to mention their own industry.

these are the people we're hoping will find it in their hearts to maximize our dollars?

just blow it up and start over. no more bailouts, let these financial whizzes show us how smart they are without the full faith and credit of the US government.

 

[glenn1]

Originally posted by: Acanthus

Originally posted by: bozack
Normally it is steal from the rich to give to the democratic base...here we have them punishing everyone, even those who had nothing to do with the situation at hand...

Those that think the top talent will work for a reduced price just because are dillusional...

The top talent can go fuck themselves.

You dont get bonuses for running a company into the ground.

You dont get bonuses from a non-functioning company.

You dont get bonuses directly from taxpayer money.

Dont like it? Dont work for AIG.

In closing, fuck off.

Great plan - tell those folks to fvck off and quit AIG so that they can go to a competing firm bringing along their detailed knowledge of AIG's trading book and strategies.

 

[Praxis1452]

Originally posted by: Red Dawn

Originally posted by: daishi5

Originally posted by: BoberFett
There are lots of talented analysts out of work right now. They'll probably work for less than millions. Are you going to claim this person is the only person in the world who can save us? How do you figure? Is there a big 'S' emblazoned on their chest?

AHH, here we go, the "they should be lucky to be employed" argument. This person left their old job because a company we bought, offered her a bonus if this person would come in and save us hundreds of millions of dollars. Now that this person came in and did the work, were going to take that away from this person.

Seriously, how the hell do you justify this? The american taxpayers own the company that employs this person, we offered to pay them a certain amount if they do a job, they do the job and we write a law to take away their pay?????? You HONESTLY have no problem with this?????

No, not at all.

I have no problem taking your life/property/whatever I feel like by force.

 

[frostedflakes]

Originally posted by: glenn1

Originally posted by: Acanthus

Originally posted by: bozack
Normally it is steal from the rich to give to the democratic base...here we have them punishing everyone, even those who had nothing to do with the situation at hand...

Those that think the top talent will work for a reduced price just because are dillusional...

The top talent can go fuck themselves.

You dont get bonuses for running a company into the ground.

You dont get bonuses from a non-functioning company.

You dont get bonuses directly from taxpayer money.

Dont like it? Dont work for AIG.

In closing, fuck off.

Great plan - tell those folks to fvck off and quit AIG so that they can go to a competing firm bringing along their detailed knowledge of AIG's trading book and strategies.

And wouldn't it be illegal to use that knowledge? Seems a lot like insider trading in that you'd be using non-public information on a company to give your business an edge and/or harm another business.

And it's not like they couldn't do what you're suggesting anyways, my understanding is that most of them were just brought in to close the books and have already been let go or will be let go soon. I'm sure there are a lot of legitimate reasons for these bonuses, but this one has always seemed pretty lame to me.

 

[ProfJohn]

Originally posted by: Hacp
Why are people paying millions of bucks to someone who analyzes the cardboard box industry? Its a freaking cardboard box.

Because the cardboard industry is a multi million dollar industry and you can learn a TON by following an industry like it.

When demand for cardboard goes up that is a sign of a stronger economy, when it goes down that is a sign of economic weakness.

If you had ever worked retail you would realize just how important cardboard is to our economy.

 

[ProfJohn]

Originally posted by: glenn1

Originally posted by: Acanthus

Originally posted by: bozack
Normally it is steal from the rich to give to the democratic base...here we have them punishing everyone, even those who had nothing to do with the situation at hand...

Those that think the top talent will work for a reduced price just because are dillusional...

The top talent can go fuck themselves.

You dont get bonuses for running a company into the ground.

You dont get bonuses from a non-functioning company.

You dont get bonuses directly from taxpayer money.

Dont like it? Dont work for AIG.

In closing, fuck off.

Great plan - tell those folks to fvck off and quit AIG so that they can go to a competing firm bringing along their detailed knowledge of AIG's trading book and strategies.

Better yet, let's just have AIG fail and watch the billions of dollars we have sunk into the company disappear.