MSNBC: House passes bill taxing AIG, other bonuses (90 percent tax on some bonuses)

[#98QBKiller]

Didn't see this posted yet...

http://www.msnbc.msn.com/id/29771499/

House passes bill taxing AIG, other bonuses

Measure places a 90 percent tax on some bailout related bonuses

The Associated Press

updated 3:10 p.m. ET, Thurs., March. 19, 2009

WASHINGTON - The Democratic-led House overwhelmingly approved a bill on Thursday to slap punishing taxes on big employee bonuses from AIG and other firms bailed out by taxpayers.

The vote was 328-93.

"We want our money back and we want our money back now for the taxpayers," said House Speaker Nancy Pelosi, D-Calif.

The bonuses, totaling $165 million, were paid to employees of troubled insurer American International Group, including to traders in the unit that nearly brought about the company's collapse.

In all, 243 Democrats and 85 Republicans voted "yes" on the bill. It was opposed by six Democrats and 87 Republicans.

The margin of victory came despite sharp Republican attacks calling the legislation a legally questionable ploy to paper over Obama administration missteps.

Minority Leader John Boehner, R-Ohio, said the bill was "a political circus" diverting attention from why the administration hadn't done more to block the bonuses before they were paid.

However, although a number of Republicans cast "no" votes against the measure at first, there was a heavy GOP migration to the "yes" side in the closing moments.

The bill levies a 90 percent tax on bonuses paid to employees with family incomes above $250,000 at companies that have received at least $5 billion in government bailout money.

"We figured that the local and state governments would take care of the other 10 percent," said Charles Rangel, D-N.Y.

Rangel said the bill would apply to mortgage giants Fannie Mae and Freddie Mac, among others, while excluding community banks and other smaller companies that have received less bailout money.

A tax expert said there is plenty of precedent for levying punitive taxes on behavior that lawmakers find objectionable. Robert Willens, a corporate tax lawyer in New York, cited the steep excise taxes levied on money paid to firms to keep them from launching hostile takeover bids, known as "greenmail."

"You can write very narrowly tailored laws," Willens said. "And they can do it for bonuses already paid."

House Democratic leaders unveiled the bill Wednesday as the head of embattled American International Group Inc., which has received $182 billion in bailout money, testified about $165 million in bonuses paid out in the past week to about 400 employees in its Financial Products unit.

Edward Liddy, who was brought in last year by the government to run AIG, told a House subcommittee that the company was contractually obligated to pay the bonuses but that some of the recipients have begun returning all or part of them.

Liddy said that on Tuesday, he had "asked those who have received retention payments in excess of $100,000 or more to return at least half of those payments." Some have "already stepped forward and returned 100 percent," he added.

In the Senate, the top two members of the Finance Committee on Tuesday announced a bill that would impose a 35 percent excise tax on the companies paying the bonuses and a 35 percent excise tax on the employees receiving them. The taxes would apply to all companies receiving government bailout money, but they are clearly geared toward AIG.

President Barack Obama, who took office just under two months ago, told reporters Wednesday that his administration was not responsible for a lack of federal supervision of AIG that preceded the company's demise.

But Obama added, "The buck stops with me."

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

URL: http://www.msnbc.msn.com/id/29771499/

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[twa]

Why stop there? ... tax the payments on credit swaps,bailouts ect..

We are rewarding bad financial choices by banks and ins companies with 100% payout on contracts...WTF is the difference?

[Dictator]

this is bad bad bad.

[Burgold]

Yeah, I don't like this solution. I dislike the "bonuses" too, but their attempt to rectify the problem seems like a really bad choice.

[hyphenatedbren]

It's obvious Congress was aware of these bonuses and just hoped no one would notice. This mock indignation about something they could have, if inclined, prevented is politics at its worst. And they wonder why people believe they're useless.

[sacase]

Bad precident.

[TheGoodBits]

Yeah, I don't like this solution. I dislike the "bonuses" too, but their attempt to rectify the problem seems like a really bad choice.

I actually kind of like it. It's like the businesses thought, "well we can do whatever because they're Congress and they can't touch us." And then Congress actually grew a pair and responded, "Well you think this is a good way to use the money WE gave you, we'll just take it back."

[twa]

I actually kind of like it. It's like the businesses thought, "well we can do whatever because they're Congress and they can't touch us." And then Congress actually grew a pair and responded, "Well you think this is a good way to use the money WE gave you, we'll just take it back."

Except Congress included paying bonuses as a legal obligation in the bill:chair:

They simply followed instructions...from Congress

[Dictator]

I actually kind of like it. It's like the businesses thought, "well we can do whatever because they're Congress and they can't touch us." And then Congress actually grew a pair and responded, "Well you think this is a good way to use the money WE gave you, we'll just take it back."

We'll see what happens with the lawsuits that will surely follow.

[Burgold]

The danger is...

We might like it as an instance of revenge... who doesn't like a game of "off with their heads!" the question is once you get a taste for lopping off heads who knows who will catch the axeman's fancy?

[sacase]

They are really screwing themselves with this. This tax applies to any company that accepted bailout money. You can best belive the top talent is going to stay far away from comapnies that accept bailout money. Good job Congress way to make a bad situation worse.

[TheGoodBits]

Except Congress included paying bonuses as a legal obligation in the bill:chair:

They simply followed instructions...from Congress

Link me please:)

Regardless, the bonuses that were paid to the execs were ridiculously out of proportion with what you would expect from a FAILING company.

We'll see what happens with the lawsuits that will surely follow.

That will be interesting... I'm no lawyer, so I don't know what to expect from that.

[Tulane Skins Fan]

So, the top financial talent is going to stay away from Goldman Sachs, Bear Stearns, AIG, Citi, Merrill Lynch, and every other financial bank?

[hyphenatedbren]

Regardless, the bonuses that were paid to the execs were ridiculously out of proportion with what you would expect from a FAILING company.

They weren't performance related, they were simply for sticking around. Somewhere along the way AIG determined these people were a necessity to do business and so promised them bonuses for not going elsewhere, performance was not a part of the bonus so success or failure is irrelevant.

[December90]

Welcome to the United Socialist States of America. If you dare to make a profit, earn a bonus or do any other "Evil" capitalist thing, then we the all knowing, all powerful Corrupt congress will simply pass a bill that steals it from you.

The ****s in power need to remove their craniums from their rectums. They are showing how full of (and covered in):pooh: they are.

The criminals in Congress need to all leave now.

Link me please:)

The Link about allowing the bonuses

[TheGoodBits]

Welcome to the United Socialist States of America. If you dare to make a profit, earn a bonus or do any other "Evil" capitalist thing, then we the all knowing, all powerful Corrupt congress will simply pass a bill that steals it from you.

Right, if they "dare to make a profit..." You do understand that these are companies that received TAX-PAYER money in the form of a bailout just so they wouldn't GO OUT OF BUSINESS?

That is the most ridiculous thing I've read on here today, and I've been hearing this argument a lot lately. Pretty sad if you ask me...

[Tulane Skins Fan]

Welcome to the United Socialist States of America. If you dare to make a profit, earn a bonus or do any other "Evil" capitalist thing, then we the all knowing, all powerful Corrupt congress will simply pass a bill that steals it from you.

The ****s in power need to remove their craniums from their rectums. They are showing how full of (and covered in):pooh: they are.

The criminals in Congress need to all leave now.

The Link about allowing the bonuses

The ability to make a profit has absolutely nothing to do with AIG, given the fact that they lost more money then there are stars in the sky.

[HOF44]

earn a bonus

I'd question the "earned" part. They ran their company into the ground.

[Bang]

Welcome to the United Socialist States of America. If you dare to make a profit, earn a bonus or do any other "Evil" capitalist thing, then we the all knowing, all powerful Corrupt congress will simply pass a bill that steals it from you.

So, a handout from the government is now considered making a profit?

Isn't that welfare?

Get your ideology straight, Zippy.

~Bang

[December90]

Right, if they "dare to make a profit..." You do understand that these are companies that received TAX-PAYER money in the form of a bailout just so they wouldn't GO OUT OF BUSINESS?

That is the most ridiculous thing I've read on here today, and I've been hearing this argument a lot lately. Pretty sad if you ask me...

We shouldn't have given them the money in the first place. Have we forgotten that if they were allowed real "Bankruptcy" then the bonuses would have never been paid. The idiots in congress gave AIG a blank check and now complains that AIG simply lived up to prior commitments with the money.

We made 1 really bad mistake so lets prove that we can in fact do worse???

In "Real" capitalism, success is copied, failures go out of business. In our American socialism, Failure is rewarded (With bailouts, etc) while success is punished. We are so backwards and our leaders are so braindead. What is worse is that our population seems to accept incompetence in the house and senate because the deliver the federal pork to the local community.

Enjoy bowing down and eating the :pooh: that our idiot leaders are feeding us. I personally don't like the taste or smell of it.

[TheGoodBits]

We shouldn't have given them the money in the first place. Have we forgotten that if they were allowed real "Bankruptcy" then the bonuses would have never been paid. The idiots in congress gave AIG a blank check and now complains that AIG simply lived up to prior commitments with the money.

We made 1 really bad mistake so lets prove that we can in fact do worse???

In "Real" capitalism, success is copied, failures go out of business. In our American socialism, Failure is rewarded (With bailouts, etc) while success is punished. We are so backwards and our leaders are so braindead. What is worse is that our population seems to accept incompetence in the house and senate because the deliver the federal pork to the local community.

Enjoy bowing down and eating the :pooh: that our idiot leaders are feeding us. I personally don't like the taste or smell of it.

Completely regardless of whether or not the bailouts were good or bad (which we won't know for some time, maybe never), arguing that taking these bonuses back in the form of taxes is bad because they "earned" them is way off base.

[December90]

So, a handout from the government is now considered making a profit?

Isn't that welfare?

Get your ideology straight, Zippy.

~Bang

<and read the sticky thread at the top of the forum, 12/90, or rule 11, and don't quote pics (edit them out), and be happy you got a break~~da staff>

Punish AIG all you want, take the entire bailout back. But the execs had contracts that the Feds did not void before giving the money so they are instituting a retroactive tax... Very Dangerous policy to think it good business to allow the criminals in congress the power to confiscate individuals wealth because the don't like the legal means with which it was acquired.

Again, we shoudl not have issued AIG the blank check in the first place. Let them go out of business if they are doing business in an unsustainable way.

Stupid "leaders"...

[December90]

Completely regardless of whether or not the bailouts were good or bad (which we won't know for some time, maybe never), arguing that taking these bonuses back in the form of taxes is bad because they "earned" them is way off base.

The slippery slope is fine as long as they stay away from your hill?

You and I don't know what the people did to earn the contracts that were written up a year ago. In many respects it is irrelevant. They had the contracts, the contracts were paid legally, and now the government decides they don't like it so they retroactively seek to steal it back. Pick whatever industry or profession you are in and think if you want the government to have the right to retroactively tax you at 90% on your contracts.

[HOF44]

The slippery slope is fine as long as they stay away from your hill?

Is the slope really that slippery??? You take Federal Funds to keep your company afloat, you can expect the Fed to be sticking its nose in things wether you like it or not. Seems simple to me. Even refreshing.

[Busch1724]

I wonder what the loopholes are to get around this legislation? These guys wouldn't come down hard on the folks that fund their campaigns.