Editore"s Note
Tilting at Windmills

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March 19, 2009

AIG MEASURE CLEARS HOUSE.... The House passed its measure today to recoup the controversial AIG bonuses. While there was some question going into the vote as to whether the two-thirds needed for passage would be there, the bill was approved rather easily.

The measure, which also applies to bonuses at other large bailed-out companies, passed 328-93. There were 85 Republicans who voted yes, and six Democrats who voted no. [...]

The bill would place a 90 percent tax on bonuses paid out by firms receiving at least $5 billion in bailout money. The tax would apply to individuals and families with overall income exceeding $250,000.

The Republican alternative -- a non-binding measure asking the Treasury Department to think of something -- was rejected. Imagine that.

House Speaker Nancy Pelosi, who helped orchestrate this vote very quickly, exclaimed, "We want our money back and we want our money back now for the taxpayers."

Passage in the Senate appears likely.

Update: Here's the final roll. Republicans were clearly divided on the issue, with 85 voting for it and 87 voting against it. Even the minority party's leadership was split -- Boehner opposed the measure, while Cantor, have hedging earlier, supported it.

Steve Benen 3:10 PM Permalink | Trackbacks | Comments (25)

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The bill would place a 90 percent tax on bonuses paid out by firms receiving at least $5 billion in bailout money.

They should have set the tax at 125 percent -- call it a Chutpah Tax!


Posted by: SteveT on March 19, 2009 at 3:16 PM | PERMALINK

I eagerly await the "OMG!! Republicans divided, party in disarray!" stories.

Posted by: SP on March 19, 2009 at 3:18 PM | PERMALINK

They should add a clause declaring that anyone who leaves AIG (or another company in the same position) and then trades against its book is committing illegal insider trading. That's the real issue here, right?

Posted by: bcamarda on March 19, 2009 at 3:19 PM | PERMALINK

Talk about cognitive dissonance. 85 Republicuns just voted for a tax increase. If Grover Nordquist were dead he'd be spinning in his grave.

Posted by: CT on March 19, 2009 at 3:19 PM | PERMALINK

Raivo Pommer
raimo1@hot.ee

EnBW Krise

Nach der Empörung über Millionen-Zahlungen an Ex-Manager unter anderem bei der Post sorgt auch der frühere EnBW-Chef Utz Claassen mit einer Pensionsklage für Aufsehen.

Der 45-Jährige verklagt seinen früheren Arbeitgeber, der die Zahlungen seines Übergangsgeldes zum Dezember 2008 eingestellt hatte. Claassen arbeite seit seinem Abschied von dem Stromkonzern für den Finanzinvestor Cerberus, erklärte ein Sprecher der EnBW am Donnerstag. Mit Aufnahme dieser Tätigkeit sei "der Grund für die Zahlung des Übergangsgelds entfallen", bestätigte er einen Bericht der "Financial Times Deutschland". Claassen habe der EnBW zudem noch keine konkreten Angaben über die Höhe seiner derzeitigen Vergütung gemacht. Der Manager hatte die EnBW nach vierjähriger Amtszeit zum Oktober 2007 verlassen.

Dagegen sagte der Anwalt Claassens, Klaus Menge, sein Mandant erhalte als selbstständiger Unternehmensberater lediglich Honorare. Laut Dienstvertrag mit der EnBW würden die Zahlungen allerdings erst eingestellt, sobald Claassen ein "Gehalt, Tantiemen oder Ruhegehalt bezieht oder das Gehalt einen bestimmten Betrag übersteigt", sagte der Jurist der Deutschen Presse-Agentur dpa. "Von Einkünften ist in dem Werk nicht die Rede", sagte Menge. Außerdem habe die EnBW kein Recht auf Einsicht in die finanzielle Situation Claassens. Nach seinen Einkünften habe sie vor der Einstellung der Zahlungen nicht konkret gefragt.

Posted by: raivo pommer-eesti on March 19, 2009 at 3:20 PM | PERMALINK

I would rather they not have specified that this tax doesn't apply to those with salaries of $250K or less. Esp since learning that many of these folks don't earn much in the way of salary and are instead paid through bonuses. Details would be nice about how many of the AIG'ers this tax affects.

If the Wyden/Snowe amendment/provision had not been taken out we wouldn't have had to deal with this at all. I'm proud to call Ron Wyden my Senator.

I'm sure Obama is realizing that Geithner and Summers are not helping him out. Obama is going to need all of the good will of the public and congress to get health care and other issues moving forward this year. Perhaps time for a change, though the confirmation process for a new Treasury Secy would be absolutely brutal at this point.

Posted by: Oregonian on March 19, 2009 at 3:30 PM | PERMALINK

Sometimes even Repukes can tell...

You don't need Bill Ayers to tell which way the wind blows

"If Grover Nordquist were dead he'd be spinning in his grave."
Posted by: CT on March 19, 2009 at 3:19 PM

We should be so lucky.

(Yeh, right, DFHs are uncivil and hateful and violent and fascistic. They're gonna say it anyway, so why not?)

Posted by: smartalek on March 19, 2009 at 3:31 PM | PERMALINK

What a pathetic display by all concerned. The American people are fast discovering the utter cluelessness of the Democrats, who have no idea what they're doing at either end of Pennsylvania Avenue.

However, I did enjoy the reasoning of one GOP Congressman whose name I can't remember but heard on Rush saying he was voting in favor of this abomination in order to show business leaders what they could expect if they ever think of asking for taxpayer money in the future.

Posted by: Chicounsel on March 19, 2009 at 3:34 PM | PERMALINK

Interestingly, this 90% is less than the tax rate they would have paid in the 50's and a good part of the 60's:

http://www.truthandpolitics.org/top-rates.php

Posted by: CarloP on March 19, 2009 at 3:36 PM | PERMALINK

"The bill would place a 90 percent tax on bonuses paid out by firms receiving at least $5 billion in bailout money"

OK. So they tax the living shit out of the bonus. Come filing time for income taxes, the Fed will have taken so much tax in that it will have to pay most of it back. For those of us who take the lowest # of deductions so the Fed can tax the crap out of our salaries so we can get a nice check back each May (or so) how is this 90% tax going to punish these guys? Has anyone out there with a MBA thought about this? How about someone from an accounting office? How wrong am I on this one...

Posted by: stevio on March 19, 2009 at 3:37 PM | PERMALINK

85 republicans just voted to increase taxes to 90%. Too funny, Reagan is probably struggling to get out of his grave as we write.

This is seriously stupid. Is there going to be a separate worksheet asking if you were employed at AIG, if you received a bonus, and what was the bonus, on our 2009 1040's ? Or will it ask the same questions, just replace AIG with Bailout Company.

I work in tax and this is just plain stupid. We will probably spend twice the bonus amount just writing this into the tax code and getting it out to the public. Then enforcement, jesus, they are are going to do all of this for a handful of people because they were too damn stupid to think of it before the cash was given to the firms.

I am all about punishing these idiots, but this is not the way. And where exactly are these revenues going to be applied, certainly not to lower taxes, they will probably go to some 'corporate mental meltdown' fund.

And what makes these clowns think they just won't give each and everyone of the an equal pay raise ? Congress will never outfox Corporate America because they don't have the resources, the unity, or the intelligence.

Posted by: ScottW on March 19, 2009 at 3:37 PM | PERMALINK

chicon it's never been hard to figure out where you get your talking points from. But now you've just confirmed it. Rush.Bwahahahahahahah.

Posted by: Gandalf on March 19, 2009 at 3:39 PM | PERMALINK

Oregonian - don't you want to know who took the provision out? Has it been established that the Treasury Department (under who?) did it? I'm still unclear about this part....

Posted by: whichwitch on March 19, 2009 at 3:40 PM | PERMALINK

The bonuses are one thing.

How about the unpaid taxes by some of the firms that receieved bail out funds. Seems to me that there should've been a stipulation that unpaid taxes be paid B4 receiving monies.

The bonus-gate is sort of annoying in that it takes the focus off of the massive bail outs.

I'm afraid Washington still is in the pockets of the financiers who screwed us all in the first place.

Taxing like this is not a good way of handling outrage.

It means someone goofed, big time.

Posted by: Tom Nicholson on March 19, 2009 at 3:54 PM | PERMALINK

Sounds like 87 Republicans and 6 Democrats aren't listening to their constituents.

Only a handful of entitled morons are against recouping these bonuses by any means available, and I find it hard to imagine they all live in those districts.

And, look at that. One of the 6 moron Democrats is MY representative.

Sigh.

Posted by: doubtful on March 19, 2009 at 3:55 PM | PERMALINK

How much will the government spend to both enforce this through the irs and defend the inevitable challenge in court to the constitutionality of this? Hastily put together legislation in response to outrage has always worked out real well. It's very disappointing how many in the left blogosphere have abandoned their senses in wake of the rage du jour. This compensation issue wasn't a secret and it's just a part of a much larger disaster that's been growing for over a decade. Fixing it is going to take some time and lots and lots of our money. Making sure it doesn't happen again is a priority. 50+ days is hardly enough to start writing off the administration. Everyone, relax. ( This isn't a "don't criticize!" plea, it's a "think, then critique" request )

Posted by: ameziah on March 19, 2009 at 3:59 PM | PERMALINK
I would rather they not have specified that this tax doesn't apply to those with salaries of $250K or less. Esp since learning that many of these folks don't earn much in the way of salary and are instead paid through bonuses.

The limit isn't based on the salary, its based on the total family income. As was stated both in the news article excerpt in the front page article this comment thread is attached to, and the different news article excerpt in the preceding front page article.

Posted by: cmdicely on March 19, 2009 at 4:03 PM | PERMALINK

Since my frequently offensive Democratic Congresswoman felt compelled to vote nay on this measure, I felt compelled to email her:

I'm curious to know your rationalization for voting nay on the measure to impose an additional tax on bonuses received from certain TARP recipients, namely AIG. If you honestly think you're representing your constituency by voting against this, I think you need to get out in the district a little more (perhaps steering clear of the Chamber of Commerce).
Nearly half of the Republican caucus agreed to this measure to recoup the money AIG and other companys' executives stole from us; I find it unacceptable that you not join them in telling the people largely responsible for our economic woes that they cannot pocket handouts from the American taxpayers.
Who the hell do you work for, anyway?

Oh, I just can't wait for the canned response. I think I'll hold my breath.

Posted by: doubtful on March 19, 2009 at 4:08 PM | PERMALINK

Probably would have more impact if I had spelled "companies'" correctly. Nah, probably not.

Posted by: doubtful on March 19, 2009 at 4:29 PM | PERMALINK

And, look at that. One of the 6 moron Democrats is MY representative.

One of the 85 moron Republicans is MY representative.

Doc Hastings voted against the people in favor of corporations. I don't know why that doesn't surprise me.
.

Posted by: Screamin' Demon on March 19, 2009 at 4:43 PM | PERMALINK

So the question remains: Why aren't we just forcing AIG into bankruptcy?

I don't buy the "too big to fail", it's nothing more than a hollow threat to get treated special, and it's working. It's fairly obvious that there are some serious financial shenanigans happening at all levels of this company. The longer we put this off, the more US taxpayer dollars is just going to vanish into some crook's pocket just like what happen in Iraq.

Posted by: Glen on March 19, 2009 at 7:53 PM | PERMALINK

cmdicely: "The limit isn't based on the salary, its based on the total family income."

Thanks... the place I originally read that erroneous info has corrected itself.

Per Olbermann, apparently this bill cannot be enforced - it's not constitutional. The Supremes will boot it. So now what?

Posted by: Oregonian on March 19, 2009 at 8:49 PM | PERMALINK
Per Olbermann, apparently this bill cannot be enforced - it's not constitutional.

Congress expressly has the power to "lay and collect taxes on incomes, from whatever source derived" (16th Amendment), a power which has been used retroactively many times before, and retroactive application of the power has been found Constitutional. So its going to take a lot more than a TV news host—even one who, as a news host, I like—saying that its not Constitutional to convince me that there is even a remotely colorable Constitutional argument against it.

Posted by: cmdicely on March 19, 2009 at 9:42 PM | PERMALINK

Pander panic. We need a chicken without a head at treasury to increase public confidence by maintaining a steady hand on the tiller without so much backtracking and reversal.

Posted by: Luther on March 19, 2009 at 10:06 PM | PERMALINK

shocked...shocked I tell you...

do a Google search on "retention payment" "not bonus"--you'll get a hit on a response to a post on a now closed MSN group from "hahaha750":

...Republicans want to keep you in your place.... and that is under their foot.....

make it tough on you and easy for them.... even to cheat and lie and steal money from you..... and they are continuing to do it today......

it's ok for AIG to spend millions of dollars for parties and for bonuses for their bosses..... (new white collar word is retention payment not bonus) http://www.cbsnews.com/stories/2008/12/11/earlyshow/main4661900.shtml?source=mostpop_story...

(thank goodness for Google's archive) The CBS News link is still active, titled "After rescue, bonuses still flying"--from 12/10/2008

deja vu all over again...

Posted by: golack on March 19, 2009 at 11:10 PM | PERMALINK




 

 

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