w00t, House passes bill that taxes AIG bonuses at 90%!!!

[Wreckem]

I laugh at the fake outrage by Congress about corporate compensation and now these bonuses.

Those fat cats in Washington waste more money, and use it just a frivioulous ways. Congress spends a shit ton on CODELs, fact finding missions, etc, which are NOTHING MORE than EXPENSIVE VACATIONS for Congressmen, their family and their senior staff.

Congress raids the cookie jar daily.

 

[Phokus]

Originally posted by: daishi5

Originally posted by: Phokus

Originally posted by: daishi5
Excellent, this sets a wonderful precedent.

Now all we need to do is tax any person who has any income from gay marriage ceremonies at 98%, and abortions, those should be 98% as well, oh, and lets no forget people who have any form of firearm, those gun nuts should be taxed at 95%. And people who rent houses, that income should be taxed at 90%.

I do not understand peoples elation. We just had the government punitively tax a group of people just because uninformed voters were upset?????

For the love of God, can you people not see the problem with this?

These people are not being taxed because of the bailout, they are being taxed because voters are upset. This is wrong. We should not allow the government to punish someone just to make us forgive their mistakes.

Make no mistake, this was because of the AIG bonuses, they just decided to toss a few other people into the tax wringer so that they could try to slip by that "evenly applied" requirement.

This is a flat out betrayel of one of the cores values of our democratic government, we should not be allowing our government to make the masses happy just by punishing a small group of people we don't like with punitive taxes.

We, the people, own AIG, they play by our rules, GG

And you're damn straight that i don't like AIG, they fvcked with our jobs, our money, our economy, they can burn in hell.

If your companies owner did this to you, how would you feel?

Especially if say, someone else screwed up your company, you were hired to try to fix a huge horrible catastrophic mess, you were promised a bonus if you did your job and got your part cleaned up, you get your part cleaned up, you leave having done a good job. You may not have fixed the entire problem, but you were able to stop part of the bleeding, the part they hired you to do, and then your companies owners say "you know what, a bunch of people who don't know what is going on think you were the cause of the problem, so were taking back your pay."

And seriously, the CEO that the government put in place to fix this stated very clearly, so let me make this even clearer THE PEOPLE RECEIVING THE BONUSES DID NOT MAKE THE MESS, THEY WERE HIRED TO CLEAN IT UP, BUT THE MESS WAS SO COLOSSAL THAT THEY COULD NOT FIX IT ON THEIR OWN

Fine, then fix the mess, but don't tell me these idiots deserve a million + bonus when their company is on life support. THAT'S FRAUD. THEY SHOULD BE HAPPY THEY EVEN HAVE A JOB RIGHT NOW.

 

[Phokus]

Originally posted by: JeffreyLebowski
This is a complete horse shit move by Congress. It's nothing but a feel good measure that will in effect do nothing. $160 million is less tan 1% of the money AIG got.

People need to be worried if this doesn't get stopped by the SCOTUS. It sets a president, that Congress can and WILL increase taxes astronomically high on people as a punishment.

Chancellor Obama hates rich people that aren't him and his buddies, what's to stop him and Congress from pulling this stunt on others later?
"Well those people make more than their share of money, So we can tax them 90% too because even though they made $1 million, they should be able to live off of $100,000.

Then the claims of look we balanced the budget, aren't we great!!!!! All the while they were litterally extorting 90% of the money out of "evil rich [white] people

What precedent? WE OWN THIS COMPANY, these mfers BOW DOWN TO ***US***

 

[sciwizam]

Originally posted by: retrospooty

Originally posted by: TastesLikeChicken

Originally posted by: retrospooty

Originally posted by: TastesLikeChicken

Yes, I think these bonuses were deserved. These people stayed on and helped to reduce AIG's liability (which now equates to taxpayer liability) by @ 1 trillion dollars.

Suddenly they are heroes .... Where did you get that info from? I am not saying it cant be true, its just the first I heard anything like that. Got credible link?

Heroes? That's not what I'm claiming. What I'm saying is they did their job and earned their money for it.

And I got the info from Liddy's testimony to Congress, which has already been linked in this thread more than once. Unfortunately it appears that few have actually bothered to listen to it.

Oh, the CEO trying to stand up for what his fucked up company did says so? I dunno if that makes it true... In fact, that almost gaurantees its a lie.

The government brought Liddy in to fix the company after they fired the one responsible for the mess. He had no previous connection to AIG.

 

[retrospooty]

Originally posted by: sciwizam

Originally posted by: retrospooty

Originally posted by: TastesLikeChicken

Originally posted by: retrospooty

Originally posted by: TastesLikeChicken

Yes, I think these bonuses were deserved. These people stayed on and helped to reduce AIG's liability (which now equates to taxpayer liability) by @ 1 trillion dollars.

Suddenly they are heroes .... Where did you get that info from? I am not saying it cant be true, its just the first I heard anything like that. Got credible link?

Heroes? That's not what I'm claiming. What I'm saying is they did their job and earned their money for it.

And I got the info from Liddy's testimony to Congress, which has already been linked in this thread more than once. Unfortunately it appears that few have actually bothered to listen to it.

Oh, the CEO trying to stand up for what his fucked up company did says so? I dunno if that makes it true... In fact, that almost gaurantees its a lie.

The government brought Liddy in to fix the company after they fired the one responsible for the mess. He had no previous connection to AIG.

How does that make the situation right or what the company claims they did to deserve gargantuan bonuses true? Libby approved the bonuses... Of course he is going to defend it to the end. I wonder what he gets out of the deal.

Regardless of all that - a broke company running off tax payers money should not be paying individual executives over a million dollars each as a bonus (many of them got that much) . It's just wrong... Even though its a minor amount compared to the whole bailout - its just wrong, its ugly, and of course we are all pissed off about it.

 

[Jiggz]

Originally posted by: Linflas

Originally posted by: MovingTarget

Originally posted by: waggy
pity that the goverment is willing to trash the constitution.


while i am upset they are getting bonuses what the govermetn is doing is far worse. all it is going to do is lead to lawsuits and such.

How is this unconstitutional?

😕

U.S. Constitution - Article 1 Section 9

No Bill of Attainder or ex post facto Law shall be passed.

In the context of the Constitution, a Bill of Attainder is meant to mean a bill that has a negative effect on a single person or group (for example, a fine or term of imprisonment). Originally, a Bill of Attainder sentenced an individual to death, though this detail is no longer required to have an enactment be ruled a Bill of Attainder.

In U.S. Constitutional Law, the definition of what is ex post facto is more limited. The first definition of what exactly constitutes an ex post facto law is found in Calder v Bull (3 US 386 [1798]), in the opinion of Justice Chase:

1st. Every law that makes an action done before the passing of the law, and which was innocent when done, criminal; and punishes such action. 2d. Every law that aggravates a crime, or makes it greater than it was, when committed. 3d. Every law that changes the punishment, and inflicts a greater punishment, than the law annexed to the crime, when committed. 4th. Every law that alters the legal rules of evidence, and receives less, or different, testimony, than the law required at the time of the commission of the offense, in order to convict the offender.

lulz pwned!

 

[Jiggz]

Originally posted by: Phokus
Finally congress gets something right, there should be no reward for bad behavior.


Huh? Do you even understand what you're posting? Any idea with regards to the constitution? So Frank and his buddy Chris screws up bad and they think they can fix it with another screw up on a 10X magnitude? Oh boy, the circus just wouldn't stop! NOW THIS IS A CHANGE WE CAN BELIEVE IN!

 

[Jiggz]

Originally posted by: sactoking
What's troubling about the legislation is that according to the Wall Street Journal, 470 companies have received TARP funds. Of those TEN will be affected by this bill. It will be hard for the government to defend that as anything but being vindictive.

This is actually what makes the bill unconstitutional! Targeting only a certain group of people based on the date of effective coverage when other groups of the same situation get exempted.

 

[TastesLikeChicken]

Originally posted by: retrospooty

Originally posted by: sciwizam

Originally posted by: retrospooty

Originally posted by: TastesLikeChicken

Originally posted by: retrospooty

Originally posted by: TastesLikeChicken

Yes, I think these bonuses were deserved. These people stayed on and helped to reduce AIG's liability (which now equates to taxpayer liability) by @ 1 trillion dollars.

Suddenly they are heroes .... Where did you get that info from? I am not saying it cant be true, its just the first I heard anything like that. Got credible link?

Heroes? That's not what I'm claiming. What I'm saying is they did their job and earned their money for it.

And I got the info from Liddy's testimony to Congress, which has already been linked in this thread more than once. Unfortunately it appears that few have actually bothered to listen to it.

Oh, the CEO trying to stand up for what his fucked up company did says so? I dunno if that makes it true... In fact, that almost gaurantees its a lie.

The government brought Liddy in to fix the company after they fired the one responsible for the mess. He had no previous connection to AIG.

How does that make the situation right or what the company claims they did to deserve gargantuan bonuses true? Libby approved the bonuses... Of course he is going to defend it to the end. I wonder what he gets out of the deal.

Regardless of all that - a broke company running off tax payers money should not be paying individual executives over a million dollars each as a bonus (many of them got that much) . It's just wrong... Even though its a minor amount compared to the whole bailout - its just wrong, its ugly, and of course we are all pissed off about it.

Liddy is trying to fix this for the US citizen. He was brought in after the fact and has no stake in AIG. His compensation for this is $1 per year. That's right. There are no 0's missing from that. This guy is taking a dollar for this because by law he must. Nor did he "approve" the bonuses. They were a legacy that he had no choice about.

Look at the facts first. That's all I'm asking. So many people are caught up in emotional rage about this issue that the facts don't matter to them. Facts do matter, always. And in this case the facts aren't what this situation has been made out to be.

 

[Starbuck1975]

Regardless of the potential Constitutional implications of this decision, it is absolutely absurd that Congress rush the stimulus package through and did not ensure the language prevented situations such as this.

Granted, given the current economic climate, AIG should know better...but seriously?

 

[umbrella39]

In a related story, the vast majority of working Americans made it through yet another year without having jobs that demand retention bonuses in the first place. My retention bonus is: If I stay at this job I get to continue to pay my bills and feed my family.

 

[Craig234]

Originally posted by: umbrella39
In a related story, the vast majority of working Americans made it through yet another year without having jobs that demand retention bonuses in the first place. My retention bonus is: If I stay at this job I get to continue to pay my bills and feed my family.

Were you in a job that required you to work yourself out of a job by shutting the division down, preparing it for closure or sale, guaranteed to leave you out of work within months?

 

[waggy]

Originally posted by: umbrella39
In a related story, the vast majority of working Americans made it through yet another year without having jobs that demand retention bonuses in the first place. My retention bonus is: If I stay at this job I get to continue to pay my bills and feed my family.

yeah...do you have any idea what the people that got the bonus did? im going to take it as a no.


these people did not have regular jobs. where youre job would be there next year (hehe well should be if hte economy was nto fucked up) the jobs these people had would not since they were closeing that part.

so most people would just find another job. but they needed the people to be there to do the work. so they offered them a bonuse to stay and finish it. So thats what they did. they stayed an did the job and got the bonus.

 

[Zenmervolt]

Originally posted by: aphex

Originally posted by: sactoking
Article 1, Section 9: "No bill of attainder or ex post facto Law shall be passed. "

If it applies for this tax year I think its fine as long as it only encompasses bonuses paid out from Jan 1st, 2009 on.

Possibly. The applicable case here is US v. Carlton, but that case does not cover a fully analogous situation. In Carlton, the USSC ruled that retroactive changes to tax laws were valid when they corrected loopholes in pre-existing tax law and when those loopholes were taken advantage of by "essentially sham transactions" and the exploitation of the loophole constitutes a "significant and anticipated revenue loss" from taxes. There are at least three opportunities for a challenge here:

- These changes do not technically close a loophole in tax law, rather they reverse a provision that previously explicitly permitted the actions.
- The bonus payouts do not technically meet the criterion of being "essentially sham transactions".
- Since there was no previous intent to tax these bonuses at a higher rate than normal, they do not constitute any "significant and anticipated revenue loss" from a tax revenue perspective.

Now, it's possible that the court may disagree with my evaluations, but it remains a fact that there is no prevailing decision that obviously applies in this case, and that it would need a court challenge to have the issues truly resolved.

ZV

 

[winnar111]

http://politicalticker.blogs.c...ed-for-bonus-loophole/

(CNN) ? Treasury Secretary Timothy Geithner told CNN Thursday his department asked Sen. Chris Dodd to include a loophole in the stimulus bill that allowed bailed-out insurance giant American International Group to keep its bonuses.

In an interview with CNN's Ali Velshi, Geithner said the Treasury Department was particularly concerned the government would face lawsuits if bonus contracts were breached.

Dodd admitted to CNN Wednesday he'd added the controversial provision after a Treasury official pushed for it. Earlier in the week, Dodd had said he had not played any role in the addition of the loophole.

Geithner told Velshi Thursday he takes full responsibility for the situation.

Also in the interview, airing in part at 5 pm ET on CNN, Geithner said:


- He does not believe TARP or the stimulus bill was rushed through Congress

- Calls for resignation are part of the job

-Officials will make sure that any further money comes with provisions (including executive compensation)

-His team will have a detailed plan for the banks w/in the next couple of weeks

-The recession will likely end in 2009, and 2010 will be a year of growth



So Turbo Tax Timmy puts in a loophole for Obama, and then they're stunned that the loophole is used, then they devise a brilliant scheme to get that .01% of the bailout money back.

Of course, we'll spend as much money, if not more, collecting on Obama's handouts than it's worth; I guess these taxes can be paid by those $250kers too.

You can bet on Geithner getting axed in the next 3 months, too. Closed at 15% on Intrade.


Moved

Anandtech Senior Moderator
Red Dawn

 

[Carmen813]

"In an interview with CNN's Ali Velshi, Geithner said the Treasury Department was particularly concerned the government would face lawsuits if bonus contracts were breached. "

I think that sounds like a logical reason to include such a loophole.

 

[umbrella39]

...

 

[Fern]

Originally posted by: Eug

Originally posted by: Fern

Originally posted by: Eug
I still don't understand how a company in such dire straits can justify a 7-digit $ retention bonus for an individual exec in the first place.

While the precedent in this law does give me pause, I can honestly say that I don't have much sympathy for most of the execs who are getting those bonuses clawed back.

IIRC, he was handling a $1.6 trillion portfolio.

Compared to that, his bonus was chump change when you do it out perentage-wise.

Fern

Perhaps, but that argument smells curiously similar to the one made to me by a financial services type when Carly Fiorina was hired. "If she's worth it, she's worth it, and her salary will pale in comparison to the worth to the company."

We all know how that worked out.

Two completley different situations.

Fiorina is in management, these people aren't.

So, because their duties/roles/expertise and areas are so vastly different so are their compensation policies.

It's helpful to think of financial services employees more like salespersons on a commision. Similarly, their monthly salary is quite low, and their bonus possibility quite high. If you pay a salesperson too much in guaranteed salary it is thought to be somewhat of a disincentive to have them work at sales. They'll be too comfortable. Plus, about 20% of your sales force makes about 80% of the sales. The ones making the good bonuses are your 20%, the others either step up their game or are gone.

I have some (tax) clients in this field, they basically work by themselves in their area of expertise. They don't manage others etc (unlike Carly). They don't really care what the stock price of this company is (unlike Carly), they're concerned with how much profit they themselves generate (unlike Carly who makes none herself) so they get a bonus.

Fern

 

[Fern]

Originally posted by: Harvey

Originally posted by: Fern

And, no the bonus is not 'black mail'. The stuff about how they could leave and trade and trade against the company etc. is the reason you (management) devises and use bonuses as a compensation tool.

Right! Uh-huh...

1. How many vacant jobs do you think are out there?

2. Right now, any employers with an available jobs have their pick of good talent. What makes you think they'd want any of these bozos just managed to lose a giga-zillion bucks while putting so many other Wall Streeters are on the street, instead of playing it? :roll:

So it's not the employees who forced this (low salary, heavy bonus plan) upon AIG, it's the other way around; AIG forced this upon employees for AIG's own benefit and protection.

What you smokin', Rufus? 😛

Harvey,

I've done consulting on the design of compensation packages, you're way off base here.

This type compensation package structure exists for many good reasons. It benefits the company and the best performers and is far superior (for too many reasons to list here) than a package more weighted to straight salary.

It's your assumption that they have a big pool of good talent. Common sense tells us that many firms lost a lot of money = many employees themselves lost a lot of money and are probably not considered 'top talent' any more.

Obviously, not so many employees did so well over the last few years so the pool ain't that big at all.

Your inability to comprehend the desirability and advantages of different compensation package structures for different industries/occupations mirrors that of Congress. That kind of thinking may well cause us taxpayers to lose a lot of money we've invested in these type compamies.

As I've pointed out elsewhere, about 20% of your employees produce about 80%. That 20% will always be able to command good compensation. I'm afraid we're gonna end up with some from the 80% group working for us if the government doesn't get a clue.

Fern

 

[Fern]

Originally posted by: retrospooty
-snip-
How does that make the situation right or what the company claims they did to deserve gargantuan bonuses true? Libby approved the bonuses... Of course he is going to defend it to the end. I wonder what he gets out of the deal.

Regardless of all that - a broke company running off tax payers money should not be paying individual executives over a million dollars each as a bonus (many of them got that much) . It's just wrong... Even though its a minor amount compared to the whole bailout - its just wrong, its ugly, and of course we are all pissed off about it.

First, Libby was installed by the federal government to look out for our investment in AIG, are you saying the federal gov put the wrong person in place? So, far there's no reason to believe that, or that he has 'bad' motives.

Secondly, that broke company is owned by us and we need the best people to unravel the crap built up by those others (who were fired). If the employees responsibly for that don't do a good job we could end up in far worst shape with far more liabilities.

In short, they're likely saving us a ton of money (into the billions if not far more).

Fern

 

[EXman]

Originally posted by: tk149
I think the bailout and bonuses thing is terrible, but I find two things especially troubling:

1. that Congress (or at least the House) has no qualms about targeting a specific, tiny portion of the population and saying FVCK YOU.

2. that Congress can tax anything at 90%.

Either of those powers can be abused to infinity and beyond...and they will be.

3. The real people that enabled this to happen refuse to take any responsibility.

 

[zinfamous]

Originally posted by: tk149
I think the bailout and bonuses thing is terrible, but I find two things especially troubling:

1. that Congress (or at least the House) has no qualms about targeting a specific, tiny portion of the population and saying FVCK YOU.

2. that Congress can tax anything at 90%.

Either of those powers can be abused to infinity and beyond...and they will be.

what if that specific, tiny portion of the population has been saying FUCK YOU!!! to the rest of the US population for the last 15-20 years? When is it OK to turn around and fuck up those assholes?

 

[zinfamous]

Originally posted by: Slew Foot

Originally posted by: tk149
I think the bailout and bonuses thing is terrible, but I find two things especially troubling:

1. that Congress (or at least the House) has no qualms about targeting a specific, tiny portion of the population and saying FVCK YOU.

2. that Congress can tax anything at 90%.

Either of those powers can be abused to infinity and beyond...and they will be.

:thumbsup:

This sets up some bad precedents. What if someone doesnt like gays and decides to tax them 95%. What if someone doesnt like the cigarrette/porn/car/computer industry and decides to tax them 95%?

They shouldnt have been given the money in the first place, im surprised the all powerful govt cant simply ake it back. The slippery slope continues.

sarcasm or a legitimate :roll:?

 

[Red Dawn]

Well it seems to have gotten the attention of 15 of the top 20 executives who received the biggest bonuses, 15 have given them back in full. So far 50 million has been returned. Of the top 10 highest earners, 9 have returned their bonuses. If all the American AIG Execs return their bonuses it would be around 80 million. The rest went to Non American AIG Execs which we have no jurisdiction over.

 

[smack Down]

Originally posted by: Fern

Originally posted by: retrospooty
-snip-
How does that make the situation right or what the company claims they did to deserve gargantuan bonuses true? Libby approved the bonuses... Of course he is going to defend it to the end. I wonder what he gets out of the deal.

Regardless of all that - a broke company running off tax payers money should not be paying individual executives over a million dollars each as a bonus (many of them got that much) . It's just wrong... Even though its a minor amount compared to the whole bailout - its just wrong, its ugly, and of course we are all pissed off about it.

First, Libby was installed by the federal government to look out for our investment in AIG, are you saying the federal gov put the wrong person in place? So, far there's no reason to believe that, or that he has 'bad' motives.

Secondly, that broke company is owned by us and we need the best people to unravel the crap built up by those others (who were fired). If the employees responsibly for that don't do a good job we could end up in far worst shape with far more liabilities.

In short, they're likely saving us a ton of money (into the billions if not far more).

Fern

First of all he was appointed by Bush, so there is reason enough to assume he is incompetent and corrupt. That is in addition to setting on the board of Goldman Sachs the company that received the largest parts of the bail out money.