Turns out that the stimulus bill contained a special exemption designed to allow AIG to pay out bonuses.
“Multiple Senate Democratic leadership sources also deny knowing how the exemption got into the bill.”
Why didn’t they, you know, read the bill that they passed? I”m just asking….
No, no I’m not just asking. The stimulus bill was the biggest single piece of legislation that any of these people will ever have their name attached to.
And they didn’t freaking read the thing before they pushed it through. Chris Dodd, that paragon of integritude, wrote and sponsored the freaking exemption in question and he doesn’t know how the exemption got in the bill? Dude, it’s in there BECAUSE YOU PUT IT THERE. It’s got your name on it, bub. Own up.
So, now that Congress looks sort of stupid (because they are stupid), they want to tax those bonuses and recover the money. One proposal is to tax the bonuses at 70%. (Wow!) It’s been suggested that such a targeted tax could amount to a bill of attainder, but I’m guessing that so long as it targets more than just the AIG bonuses, it’ll be OK.
My question about a 70% tax on bonuses is, “you gonna tax all the bonuses, or just some?” I’m fairly confident that a number of people who received the bonuses will make less than $250,000 this year. I’m also pretty sure most of these bonuses were contractually guaranteed, which means that those recipients were counting on those bonuses as part of their regular income. Now they get a special 70% tax on their income because Chris Dodd is a freaking weenie and won’t defend the text of the law that he wrote and sponsored.
Here’s the quote,
If you make under $250,000 a year, you will not see your taxes increase by a single dime — not your income tax, not your payroll taxes, not your capital gains taxes, no taxes.
Yeah, yeah, I know; he’s already broken that promise (March. It’s March. He’s been in office less than two months.) but 70%? Them’s a lot of dimes.
The bonus stuff is all absurd. If you’re going to bail out a company, you give the company money to fulfill its obligations–that’s the point of a bailout. Now, I think the bailouts are a bad idea, but you can’t give the company money and then complain when they spend the money you gave them. That’s what you gave them the money for in the first place!
Sure, the bonuses are politically unpopular, and they should be, but the bonuses aren’t sneaky deals, they’re the cost of AIG staying in business. They’re like office supplies or computer equipment or employee compensation. The bonuses don’t represent AIG doing the wrong thing with the bailout money, they represent everything the bailout money is designed to be used for: evading the consequences of catastrophic failure.
Of course, that doesn’t make the posturing and monumental ignorance of the twits in Congress any less disheartening or contemptible.
Ps. Oh, Goldman Sachs got $93 billion of the bonuses. Geithner and Paulson are both from Goldman. Goldman depends on AIF for $93 billion and AIG gets a bailout with an exemption authorizing the bonus. Lehman was a competitor of Goldman. Lehman didn’t get a bailout. I’m just saying…. If the recovery tax somehow exempts Goldman, I won’t be too shocked.