Article Source: msnbc.com
from:msnbc.comTwo Democratic senators on Thursday proposed legislation that would impose a one-time tax on bonuses paid to executives of companies bailed out with taxpayer money.
You're in Easy Mode. If you prefer, you can use XHTML Mode instead. |
Ally aims to end mortgage woes with ResCap filingAnalysis: Argentines jump through new hoops to get dollarsSNAP Grant Allows Little Rock Homeowner to Replace HVAC Unit After 10 Years Without Central AirThe little things: Managing a micromanagerFive Ways to Tame Your InboxSenior Talent Joins GoPago to Drive Product Development and Expand Sales Multi-Faceted Automotive Mecca Hot Rod City, Home to the World Famous Dezer Collection and Las Vegas Choppers and Tattoo Parlor, Celebrates Its Grand Opening Saturday May 12 From 10-5 Oil price still falling, near $93 a barrelColossus Minerals to Present at Macquarie's "Making the Grade" Mining ConferenceSpain's Repsol sues Argentina over YPF takeover
Leave a Comment:
Of course the tax is fair. If the gov't hadn't bailed out the company, the company would have been bankrupt and there would have been no company left to pay them their contractual bonuses. Their bonus contracts would have been worthless. Therefore, but for the government's intervention, they get to be paid bonuses. So pay the one that helped you get them!! If they don't like it, they can pretend they are as unemployed as the executives at ENRON were immediately after it went belly up. That's what happens when the government does not bail you out.
I agree Heide.
If we didn't bail them out, they would have gotten a bonus of 0.
More than agree with this 50% tax on this.
I completely agree!
Well for one thing I think that would be taxation without representation and the Constitution wouldn't allow it. If Obama would have left his filth hands of it the banks could have declared bankruptcy which would have nullified the bonus contracts and they would not be required to pay them out.
Sorry Heidecraig I just was so mad about this whole mess I really didn't read your post to see you said the same point I was also trying to make. What really makes me mad is I am only a High School graduate and knew this basic point why didn't all these College graduates?
donna426
Well for one thing I think that would be taxation without representation and the Constitution wouldn't allow it. If Obama would have left his filth hands of it the banks could have declared bankruptcy which would have nullified the bonus contracts and they would not be required to pay them out.
===============================
Sorry to pop your Hate bubble but it was the last guys that push and got it pass with out the rule to stop this silly Crap from happening.
Remember their to big to fail and Chapter 11 well wipe out the USA.
As for the Tax outstanding,I just wish it was some one alts that was pushing for it.
Bush cocked the gun but it was Obama that pulled the trigger.
donna426
Bush cocked the gun but it was Obama that pulled the trigger.
===========================
Nice .Now how about telling me how that works OK.
10/14/08 - Bush orders 7 major banks to accept an infusion of $250 billion taxpayer dollars. The banks involved are: Bank of America, J.P. Morgan Chase, CitiGroup, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of N.Y. Mellon, and State Street Bank.
former Bush speechwriter Matt Latimer wrote in an upcoming book (excerpted by GQ) that, even hours before he gave an address promoting the TARP, Bush fundamentally misunderstood what the program was all about.
Treasury Secretary Hank Paulson ultimately abandoned the idea to buy toxic assets entirely, instead opting for bank recapitalization, devoid of meaningful strings for the banks. As Latimer reported it, “the treasury secretary didn’t seem to know [which course of action he favored], changed his mind, had misled the president, or some combination of the three.”
so how did obama pull the trigger. use the internet and move your education up a level.
Only $250 billion? It is now over $750 billion. Obama just keep giving and giving like it would help anything. Now if he would have taken his time, like as long as it took him to decide to send more troop to Afghanistan, maybe he could have figured out that there might be a problem. He didn't stop there he decided that the car makers needed a piece of the action. Most of these banks has paid back the money that they were either forced to take or they just took. Obama realizes that he will never see a penny out of the car makes so he has decided to pinch the banks a little more to help his union buddies out at GM and Chrysler.
"Well for one thing I think that would be taxation without representation and the Constitution wouldn't allow it." Have you looked at what the government, our elected officials" are doing to the American working class. This is really taxation without representation. The Tea Party is beginning in Tennessee now!
It think 50% is a little low. In the back of my mind, what is to keep banks from actually raising the amount of bonuses to compensate for the tax? Business does this type of stuff all the time.
it was to show that it was not obama pulling the trigger. never did i say that he did not dip into the system himself. this was a monumental failure of all political figures that we have selected for washington.
A one-time tax?
How about an every-time tax, like the rest of us experience?
Ex post Facto laws; violate the Constitution of the United States; our Congress knows this, however by proposing this tax, they show the citizens, that they really care. ( the only thing they care about is getting re-elected)
With the current Supreme Court ruling about campaign contributions, we can all pretty much kiss goodbye any and all legislation and bills that would benefit anyone but corporations.
bckrd1...Did you just gloss over the true beneficiary....THE POLITICIANS?
Corps OWN the politicians txmom. They only benefit because the corps do.
clarke ong....they also benefit from special interests that are as powerful if not more so than corporations....Grass Roots organizations, Unions, Special interest lobbies...
My guess is Bckrd that you do not know a damn thing about what the Supreme Court ruling actually was..
The part of the law that was stuck down as being unconstitutional stated that 30 days before a Primary, and 60 days before a General Election. Companies could not run adds for the person they supported, or against the other person running..
Do some research before you go blabbling about stuff you do not know about.
Forget 50%, tax the amount over $400k at 99%. Greedy bastards!
You are also not disclosing all the details or possible loopholes that will incur these companies to increase fees to users.
So how many of these Employees will include in their next contract that the Bank pay any cost associated with an increase in tax on bonuses and for that fact other employee benefits costs?
HMMM and how many of these Institutes will honor that in a contract because, based on the stance of the last round of defeats when this administration tried to punish recipients of TARP funds, it is the cost of business in order for these companies to retain these highly valued employees.
So when Barbara Boxer is claiming this is not class warfare she is absolutely correct because those employees will continue to garner higher and higher bonuses, the banks will assume the tax and either reduce their shareholder dividends or raise the cost of their service to put more money in the coffers of Washington.
I call that a long term milkable gimmick. Silly Boxer....like no one sees through your sordid gaming of the consumers.
That's why the tax needs to be 99% so it would be too costly for the company to absorb the tax on the employee.
Woz2000...Do you begrudge people in other industries making bonuses? There are many industries that actually consider the bonus structure of, particularly management employees, but also mainstream employees to be a valuable incentive to assure productivity and decision making is on par with the Corporate culture.
For instance...an employee makes a salary with benefits. In addition to this many companies offer additional incentives of bonus on a floating scale of percentage of pay when the company or individual meet benchmarks. This is actually a valuable structure for the Business, Employees and community because the business has a tool to measure productivity, the employee has goals to meet to garner wages above basic pay grade and the community will see a reasonable share of these funds to promote commerce.
The only benefit to attaching a penalty to businesses for these incentives is to make sure the the FED gets a bigger share of the pie.
If they raise the tax to 99% then those funds will be raised in the form of fees to the consumer. They aren't going to attack stock holders because well they do that too much and there will be no investors. They have to tag the cost to marketable products.
txmom32 the convo is about AIG and the company that got Tarp .thy are the targets of the TAX. So your rant about pay grades in the privet sector is just silly.
Ps if you Don't want to have them pass on the tax to you then don't do biz with them its just that simple.
Night....those companies did this last year and the outcome was they kept their bonuses. Those companies did this the year before and the outcome was some gave back bonuses but many did not. The fact of the matter is until the current administration changed the terms of the TARP all of these companies were private sector jobs. When is our FED going to stop themselves from interfering in arenas they do not belong.
The need to keep hands off. Collect the outstanding TARP debt and pay down our National Deficit.
Night....On a personal note I invest...LEND...much more than I have in debt.
txmom32 we are in trouble because the Fed did not do its job and thy deregulated Wall-Street and the Banks.
Sorry to say this but Wall-Street and the Banks don't want it fix and do like having the public on the Hook if thy blow it.
Its to late to clam that the bank and wall-street know what thy are doing,if thy did we would not be talking about this right now.
And I well say it again ,if you don't want to have to pay the charges that been pass on to you don't do the biz with that bank or company.
Night....
We are in trouble because the Federal Government wishes, and have for many administrations, to over take commerce in this country.
TARP should have never happened under Bush and the terms should have never been changed under this Administration.
It was a mistake that should be allowed to correct itself. The funds need to be paid back to the Federal Government and the Federal Government should then apply the payback to the debt. Preferably China debt so we can separate them expeditiously.
The best remedy for the banking industry is to let the big abusers fail. Yes it will create a short term hardship. Then comes the Renaissance that will correct many of our current ailments in our economy as well as the Global Economy.
Let me reiterate....My debt load is considerably smaller than my investment load. Not much is invested in Financial.
My concern about passed on cost are for those who are currently underwater from overuse of financial access.
txmom32 I agree with your reasoning and your understanding of things.
But I have no trust of Wall-street or the Banks to fix what thy have abused.
Who other than the Fed do you think should be trusted to fix it and regulate it.
The Bank well only work it so it works in their favor the same for Wall-Street.
So who do you sagest can be trusted to Fix it if it is not the Fed then?.
So Who do you think can be a 3 party arbitrator to fix this night-mare.
Night....Basic Capitalist Principals will correct most of our ills. Go back to the laws of supply and demand. These will set realistic interest rates for lending. These will set housing prices at a natural level for economic times. Trying to "save" these companies did no one any favors but the Government. They spent years bastardizing the principals of free market and capitalism, from the point where we went off the gold standard.
It is time to reset the clock and yes it will hurt because we have set the stage over many for great pain. Putting it off longer will further that end.
As for a 3rd part arbitrator...That has been the Fed for many years. They have proven themselves a poor adviser and a huge factor in the debacle at hand.
No disagreements with that at all txmom32 ,but as you know its not going to happen on its own.
The banks and wall-street have been at the toff to long to go back to a some real Capitalist Principals.
Thy lose to much money and control of Government and public to do so.
We are back to if not the Feds and not the markets AKA BANKS then who make them do it.
How about the shareholders of public companies file suit against the Board for paying out too much of the profits. This money belongs to the shareholders who take the risk, not the employees who risk NOTHING.
only 50 percent? they should tax the TARP firms' bonuses at 110 percent.
Didn't they go through this charade last year?
Yes they did. Same old song and dance. Have we seen improvements from these lending institutions? No
Might be time to try a different approach.
You right brian they did..
They know that it is not constitutional do enact these taxes, just like they did before. They are spouting off to get the sheeple all riled up and continue the class warfare this administration has wanted since it came to power.
Jeremy, show us where in the Constitution these types of taxes are prohibited.
true- realist I agree. so show us this paragraph in the Constitution that says the Fed cant tax them
Here you go.. Its all about the post facto laws.. The same reason they could not pass the tax last time.
the bonus checks have already been given, and agreed to. You cannot pass laws that effect said bonus payments because now you do not like it.
In the United States, the federal government is prohibited from passing ex post facto laws by Article I, section 9 of the U.S. Constitution and the states are prohibited from the same by clause 1 of section 10. This is one of the very few restrictions that the United States Constitution made to both the power of the federal and state governments prior to the Fourteenth Amendment.
If it's not 50% now what is the tax I wonder? Are bonuses taxed at all?
Bush and Repubs did their best to repeal the graduated income tax, and greatly lowered the top percentage.
JFK was actuall the president that got it lowered from toe original 90%! Now, the top rate is no higher at $100 million a year than at $250,000.
And, don't forget, hedge fund managers who make "salaries" in the $10 million and up range are taxed at a lower rate (15%!) than their secretaries!
Ain't life grand, if you are rich enough!
donna426
Well for one thing I think that would be taxation without representation and the Constitution wouldn't allow it.
The tax is being proposed by the representatives of the people in the Senate. You should really take a remedial civics lesson before you make such incredibly ignorant statements.
I agree 100 % with true- realist Statement
Of course it is fair! These people should NOT be paid extra for destroying our economy! Where is my bonus from '09? Oh yeah, sitting in THEIR pocket because my boss lost too much from the economic fall-out last year!
Absolutely this tiny minority of super-wealthy men and women should be the ones fixing what they destroyed. Yes, greedy little people issued loans to unqualified people who were trying to live beyond their means. However, that would NEVER have occured if these executives were doing the job their PERFORMANCE BONUSES are paying them to do!
That is certainly more fair than the big bank tax, which applies to institutions who took no bailout. However, its Constitutionality and discriminatory aspects are subject to question. Is it a "bill of attainder" under The Constitution of the United States, Article I, Section 9, paragraph 3 or is it retroactive i.e "ex post facto"?
I'm sure it would be challenged, and maybe successfully, no matter how much it satisfies the public's need for retribution. Thus this seems more like political posturing rather than reality.
Article I, Section 9, paragraph 3 as it has been interpreted by the courts over the years almost exclusively applies to criminal cases. However;
In the 1994 opinion United States v. Carlton, the U.S. Supreme Court unanimously held that retroactive tax laws did not violate the constitutional prohibition on ex post facto legislation, provided their retroactive application was "supported by a legitimate legislative purpose furthered by rational means"
That case dealt with the validity of a change to the the 1986 Tax Reform Act, which included only a modest retroactive period which was"confined to short and limited periods required by the practicalities of producing national legislation." Further, the outside limit was for applicability to transactions in the year preceding the actual date of enactment. Generally this has usually (I'm not aware of any significant exceptions) meant that retroactivity to the year legislation was introduced is OK, even if actually enacted in a later year.
Additionally, such a targeted tax first introduced after the date in which the income is earned would probably have close scrutiny. It's not just an amendment like Carlton.
The precident has been set. The tax is passed will holdup legally with no problem. Just as retroactive tax cuts have passed so will this. Retroactive tax provisions have been upheld against Constitutional attack in numerous cases.
There is nothing unusual about retroactive tax laws. "Congress almost without exception has given each such statute an effective date prior to the date of actual enactment.... Usually the 'retroactive' feature has application only to that portion of the current calendar year preceding the date of enactment, but each of the Revenue Acts of 1918 and 1926 was applicable to an entire calendar year that had expired preceding enactment." United States v. Darusmont, 449 U.S. 292, 296, 101 S.Ct. 549, 551-52, 66 L.Ed.2d 513 (1981) (per curiam). Most such retroactive enactments have been upheld as against due-process challenges, on the theory that some limited retroactivity is necessary as a practical matter to prevent the revenue loss that would result if taxpayers, aware of a likely impending change in the law, were permitted to order their affairs freely to avoid the effect of the change.
If you wish to continue in your failing attempt to defend wealthy bankers, go right ahead. You will not find any sympathy from the American people on that.
quite frankly, I would like to call "BS" on the whole "we have to give these guys a huge salary and bonuses or we'll lose the top talent" argument. I would like to call BS on it.
I'm a hiring manager. and I would like to submit two scenarios. I would appreciate it if other hiring managers would consider these scenarios and submit their opinions.
scenario 1 - AIG executives get no bonus and no salary increase. or a very limited bonus & increase. so they quit. they go to ... ohhh, say ... Fidelity Investments in Manhattan.
hiring manager - ".. your resume looks impressive, may I ask why you left your former employer?"
former AIG exec - "well I demanded a million dollar bonus and they only gave me a $40,000 bonus so I showed them, I quit!"
hiring manager - "so you're selfish and disloyal. get the hell outta here . NEXT!"
****
scenario 2 - AIG Manager goes to Hong Kong or Tokyo or Berlin or London
hiring manager - ".. and may I ask what your previous experience is?"
former AIG exec - "well I was in charge of managing the toxic investment funds that destroyed the American dollar, and now I'm prepared to help your fine institution achieve the same successes"
hiring manager - "ah, so you're a moron then .. get the hell outta here .. NEXT!"
***
the people who managed to keep their jobs are damn lucky.
they deserve no bonuses.
I feel no sorrow for any taxes levied against their bonuses.
and to submit that we need to keep them in their positions "or else they'll walk" is a weak and empty threat.
Or you are forgetting the 3rd option.
scenario 2 - AIG Manager goes to Hong Kong or Tokyo or Berlin or London
hiring manager - ".. and may I ask what your previous experience is?"
Former AIG exect - I was in charge of one of the profitable divisions of AIG, and after doing what I was supposed to be they reneged on my contract due to the Gvmnt punishment for other areas of the company.
hiring manager - I can understand that I would not have enjoyed my contract being steped on either.
You also forget that the people that CAUSED the mess at AIG have already been fired. The people getting these bonus payments are from profitable divisions.
Its all about this administration trying to rile the sheeple.
Sorry, but to the best of my knowledge, nobody has gotten fired over this, except for the CEO. These brilliant masters of the universe drove AIG off a cliff, and now we must pay retention bonuses???
If you read mor thoroughly, you will see that these bonuses are target PRECISELY at the managers of the failed divisions, not across the board. No moral compass there! I have to wonder what they would think about this in a culture that honors honorable actions, such as Japan.
Jeremy-960164 You missing the point AIG should have gone in Chapter 11 and no one should be under the old contracts at all.
In short we the people Bail out your ass out and we the people should not be giving you any thing but a pay check.
You got to keep your Jobs unlike a lot of citizen that lost their jobs because of AIG FICKING UP.
Got it Now ,can you see the light of understanding of how we the people see it !
Back to my original point which started this discussion. Had the government not injected hundreds of billions of dollars and guaranteed even more of each of these companies' debt, they would have had to file for Chapter 11 bankruptcy. In bankruptcy, the trustee would have been able to discharge the obligation to pay the contractual bonuses. But, because of the government cash/debt guaranty infustion, the contracts didn't get wiped out in bankruptcy as they most certainly would have. Therefore, the folks that reaped this windfall should not complain about paying some of their money that, for all practical purposes, the government gave them. It is not as if the government is trying to tax the bonus contracts of fiscally responsible companies that reaped no windfalls from the bailout.
hell, why don't we just tax everybody at 50%.......... eliminate the deficit...
I'm already being taxed at combined state/federal level of 50% so if "gave up" and others are willing to raise the entry level tax brackets of combined state/federal/fica/soc.sec. to 50%, I'll be waiting for you when you get here.
You need a new tax adviser. Virtually no one pays that percentage of taxes these days.
really so when you look at your w2, you are saying that if you made 30000, for the year, you paid 15000 in all combined withholdings. interesting.
Maybe the Federal government should take a tip from some of the states and institute a gross receipts tax on these so-called banks. The IRS could really clean up if these banks did not get a deduction for the excessive compensation they pay to their hotshot traders. I say so-called banks because they really don't loan alot of money anymore as traditional banks do. They make their money trading securities and "derivatives" for their own account. These are not commercial banks at all.
Yeah, that'll fix 'em, by cracky!
Yeah, right... .
the only bitch we have is that if a bank still has funds from the bailout then go after them. if they have paid the money back and owe nothing, then business as usual. as far as i'm concerned never, ever ask for a dime from us and let true capitalism do as it would with them.
"then business as usual"
That worked real well.
that is why the last sentence said for them to never come to us again and let the markets eat them up. finish reading.
Look at em our leaders complain about the bonuses but when its time to do something they don't want to. Ted Turner says these bank employees deserve their bonuses because they compare to sports super stars.
Top federal tax bracket is 35% plus 8% state tax plus 7.25% fica that everyone pays regardless of income = combined marginal tax bracket of 50.25%.
35% is before deductions and credits. Everyone gets deductions. If you are actually paying 50% you are a fool.
you realize that that 7.25 which i believe you are a percentage to high is going to your mom or dad, right. do not like your state tax move out of the state go to a state that does not have income tax, just dont complain about your property taxes. if you are in the 35% bracket then you are making over 373650.00 per year, that is not so bad. hate to see you have to live like the average american house hold of 86000 here in mass. how would you like the highest federal tax bracket of 94%. that was 1945-46. lets look at the reagan years. 1980 70%, 1981- 69.125 1982 to 1986 - 50% 1987 - 38.5% and then 1988 goes to 28%. and all the republicans love the reaganomics. i am not knocking you for making the money, but if you went in not thinking that you had taxes to pay you are out of your mind.
The standard deduction of $7,500 and credit of $5,000 unfortunately don't change my overall tax rate. Of course it does for a lot of other tax payers.
No one should mind paying taxes but where you work 20 hours a week for your family and 20 hours a week for the government, there's something wrong with this picture especially where the government is using your money to bail out a bunch of fiscally irresponsible bankers and auto makers.
your complaint is like mine. i know i have to pay taxes, i just do not agree with where the money is being spent. your standard deductions are off though. single deduction is 5700, married jointly 11400, and head of household is 8350. the exemption amount is 3650.00 per person. oversimplifying the system is just an attempt of us all to make your situation seem worst. i do not know your life and do not assume to know.
No baby: 100% fee on their busted-A$$e$! If they don't like it: Take-A-Walk!!! Who cares!!!
Of course Obummer wouldn't be really for it! These guys got him in the oval!
Third graders in this country are expected to know who the President of the United States is and how to pronounce and spell his name. What is your excuse?
He isn't worth spelling it right!
Let's See Citizens that exceed the pocket book generally have a NSF (Non Suffecient Funds) printed on the account ledger which is then forwarded to the Justice Department which then Issues APB's All Police Bullitines for amounts as low as $40 and these Individuals will shortly see a Jail cell if apprehended for stays until a court date is available or bail acquired. (at the expense of Taxpayers).
Bankers and Corporate Bosses, Suites on Wall St reach a deficite and exceed it due to shall we say poor decisions get a pay Raise and a multiMillion Dollar Bonus which in turn then passes the fees to the customers and now taxpayers for revenue collections I somehow think there is a Double Standard here?
If the American public wasn't up in arms about the government bailout of these companies do you think anyone would have even mentioned a tax on these bonuses?
I doubt it.
Good Point James I'll let em tax me at 95% for 16 Million I'll Shut my Yap!
It's just the principle of everything They are given a bonus for receiving taxpayer money i just think Duhhhhhhherguhhhhh! And Republicans call the the citizens Lazy if they require a helping hand like welfare, If the Kids of the rich wont fight the wars who will ?