The Jury Talks Back

3/16/2009

Mad About AIG Bonuses?

Filed under: Uncategorized — Kevin M @ 8:47 pm

Mad about AIG bonuses?  Feel that the taxpayer is getting ripped off?  A humble suggestion:  Make the bonuses toxic.

Seems fair, after all, given that AIG championed the “credit default swaps” that has every bank in the world in shambles.  Toxic bonuses for toxic paper.

Tax them.  Put a tax on carefully-defined bonuses such that any income which includes a 2009 AIG bonus is taxed at, oh, 97% from the first dollar.  Unfair?  No.  Legal? Welllllllllll, maybe not.

But would you deposit the check?

(note: It isn’t ex post facto, see United States v. Carlton 1994)

Update (3/19):  And actually, I’m embarrassed that Congress actually did such an irresponsible thing.  Life imitates jest.  But that’s what clowns are for.

8 Comments

  1. What a shock, companies that have managed their money so poorly that they should have gone out of business, continues to spend money they seemingly shouldn’t. If only past performance was an indicator of the future…

    But, the money’s been spent. Taxing AIG, the employees, whatever… it’s trying to shine a turd at this point. All the bailout money is just a huge waste, postponing the inevitable. Just let it go.

    Comment by Buzz Killington — 3/17/2009 @ 3:57 am

  2. AIG is a total fraud against the American taxpayer.

    Our congress critters are basically putting more of your money into their own trust funds as it’s AIG that insures them!

    These bastards should have been flat out fired!

    Comment by TC — 3/17/2009 @ 10:31 am

  3. The last time I looked, that kind of tax sounds a lot like a bill of attainder. Any attorneys want to comment on that aspect? Smells particularly bad, since the congress signed off on a clause that preserved existing contracts . Doofuses didn’t even read what they voted on.

    Comment by Barsinister — 3/18/2009 @ 11:54 am

  4. My daddy (26 years as a DOD civil servant) told me time and time again: when the government gives you a check, cash it.

    I’d cash it in a heartbeat.

    Comment by Viktor Nehring — 3/18/2009 @ 2:02 pm

  5. Barsinister — well, yeah, but for cynical political posturing it’s actually quite good. When the courts strike it down, Obama can just blame those evil Bush judges!

    As I said originally, I doubt its legality — bill of attainder being the most obvious. But then I wasn’t after just taking their bonuses — I wanted to make the bonuses poison their OTHER income.

    Maybe we should just pay the bonuses in mortgage-backed securites…

    Comment by Kevin Murphy — 3/19/2009 @ 7:58 am

  6. how do we know that the people getting these bonuses were involved in the activities that got AIG in trouble? I was w*rking for NME when they got caught doing bad things with medical billing in the early 90’s, and i had to take ethics training, even thought i had nothing to do with it.

    fast forward to 2001, and i land a j*b with Tenet (the new NME). a year or so later, they get caught doing illegal things again. were you going to take my pay for what they did?

    this is bullshit: unless you can prove that the folks getting this money did something illegal to earn it, all you are is a lynch mob.

    Comment by redc1c4 — 3/19/2009 @ 10:30 pm

  7. (note: It isn’t ex post facto, see United States v. Carlton 1994)

    Carlton is inapposite. There, the question was whether Congress could retroactively deny a deduction they had created accidentally, not whether they could effectively fine conduct after the fact by “taxing” it at a confiscatory rate. The ex post facto clause was not even mentioned in Carlton.

    Most of the discussion has surrounded the ex post facto clause and the bill of attainder provisions, both of which I believe were clearly violated in substance if not in form. But what of the takings clause? If Congress can tax money out of existence solely because they feel like depriving someone of it, why can’t they “tax” any other property they’d like to take without just compensation? Or, if one must draw too big of a distinction between cash vs. in-kind takings, they could accomplish the same by taking whatever property they wanted, paying “just compensation” on paper, and then taxing said “just compensation” at a rate of 100% (or, adding insult to injury, 110%).

    Comment by Xrlq — 3/23/2009 @ 5:23 pm

  8. xrlq–

    Or, as I proposed, making it so toxic it tainted their other income, too.

    I confess I read a summary of Carlton, not the actual case, but it seemed that the point was that ex post facto hardly ever applied to tax cases (or, indeed, civil cases). Attainder is a different matter. Takings is better yet.

    And, no, I don’t much care for this action by Congress. Worse, I don’t much care for the idea the courts might allow it.

    Comment by Kevin Murphy — 3/23/2009 @ 7:01 pm

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