Bill Passes To Tax Bonuses At 90 Percent
March 19, 2009 by Tisa Silver
Filed under Finance
The U.S. House of Representatives has approved a bill that would tax executive bonuses at a rate of 90 percent!
Photo by Obama-Biden Transition Project, courtesy of flickr
The bill is no doubt in response to the revelation that AIG paid out millions of dollars in executive bonuses after receiving bailout money.
According to MarketWatch, the new 90 percent tax rate will apply to bonuses that are paid to individuals who make more than $250,000 per year and work for companies that received more than $5 billion in government funding.
The bill passed with a vote of 328 to 93. Who would have thought that legislators could act this quickly on a tax bill.
Meanwhile, shares of AIG closed 14 percent higher.
Now that we are knee-deep in the bailout, it is very easy to say that these types of rules should have been thought of before the money was dispersed.
But the entire bailout process has been a set of truly extraordinary circumstances and sometimes those circumstances have been met with rushed responses.
Something had to be done, but was this the right thing to do?
Government doesn’t get much stupider than this.
So little Timmy Geithner got his bud Chris Dodd to slip a provision into the porkulus bill to ensure his buds at AIG got their bonuses. No one read the bill, but they all voted yes. The Pres signed the bill without reading it. Now everyone feigns indication, gets all holier than thou, passes punative legislation that creates a whole serious of perverse consequences that could cause the best people to leave the instutions that accepted TARP money among many other things.
Now that is what I call genius in action.
Hi Jim, thaks for your comment. The bill on bonuses seemed to be more emotional than practical and I doubt it would become law in its current form. Many of the execs have decided to give back the bonuses.
I think the real point is the ineptness of politicians trying to micro-manage anything…. what a comedy of errors (and I didn’t even discuss what Geithner knew at the NY Fed) accompanied by a slew of unintended consequences. Here we are 80% owners of a company run by our hand-picked CEO with a hand-picked board of directors and we still can’t control what goes on there, though we have no problem browbeating GM, Chrysler and the auto unions into concessions over much smaller sums of money. Now the Congressional shenanigans over this punitive tax on the outrageous AIG bonuses have scared the crap out of every company who has taken TARP money, and they are scrambling to pay it back as soon as the Treasury will let them, defeating the purpose of the TARP to begin with.
Having these clowns steering the ship of state doesn’t help me sleep any better at night, but them I’ve felt that way for as long as I can remember. I think Mark Twain was right when he said: “Suppose you were an idiot. Suppose you were a member of Congress. But I repeat myself.”