WASHINGTON (CNN) - Senate Democrats want to tax the controversial bonuses doled out to AIG employees who work for the division that led to the company's downfall.
Senate Majority Leader Harry Reid announced on the Senate floor Tuesday that the tax-writing Senate Finance Committee will pursue a legislative fix in such a way that the "recipients of those bonuses will not be able to keep all their money - and that's an understatement."
Senate Finance Committee Chairman Max Baucus, D-Montana, will propose a special tax within the next 24 hours, Reid said.
"I don't think those bonuses should be paid," Baucus said Tuesday.
The idea was first floated Monday by Sen. Christopher Dodd, chairman of the Committee on Banking, Housing and Urban Affairs.
"One idea we're kind of thinking about is a tax provision," the Connecticut Democrat told CNN. "We have a right to tax. You could write a tax provision that's narrowly crafted only to the people receiving bonuses. That's a way maybe to deal with it."
At an unrelated hearing Tuesday at which IRS Commissioner Douglas Shulman was testifying, Baucus asked the nation's top tax official, "What's the highest excise tax we can impose that's sustainable in court?"
Shulman did not respond directly, but Sen. Bill Nelson, D-Florida, chimed in to suggest the tax could be as high as "90 percent."
Here's what I think. First of all, before supporting or resenting the notion of tax provisions on AIG, stop the funding of it all together. Next, have the people who were RESPONSIBLE for these greedy acts, come up and make testimony to Congress. Then, after bipartisan converstations between Congress and the White House, and if the taxing notions seems legitimate, use tax provisions and other methods of getting the money back.
I hope they do tax these fools. My father invested in AIG and when we cashed in his investment we were taxed big time. So it's only right, tax the little people and no the ones who got this company into this mess.
What a great idea! I recommend a 90% tax on any amount exceeding the 2009 poverty level income base of $10,834.
This is NOT a Harry Reid or Chris Dodd issue. This BONUS agreement was signed, sealed and delivered when the merger took place under George W. Bush. AIG did not disclose this fact, funny that huh? NOW we know WHY!!!
So in all fairness, we need to get the facts straight!!!
The FACT is, the Government NOW owns 80% of AIG stock, they should FORCE them into voiding out the agreement or SELL parts of AIG to the highest bidder!!!
Where there's a will, there's a way to NAIL AIG for their blatant stupidity and negligence. You have to beat a rat at their own dirty game, but it always takes TWO to play.
Don't everyone get too excited about the proposed 90% on AIG bonuses. You need to be more concerned when this IS NOT limited to AIG! Congress (the Libs in particular) has never met a tax they didn't like!
Hey CNN, why aren't you hammering the point that this nothing less than an Obama administration and Congress, specifically Chris Dodd, complete screw up? Dodd is bringing the tax garbage up now because he is the fool that put in the amendment that would allow these bonuses to go through and Geithner either ignored or overlooked the fact that all large corporations have employee contracts including bonuses. Both of these just show complete incompetence. Could the fact that Dodd was the biggest recipient of campaign contributions from AIG and that AIG is based in Connecticut, where Dodd is from, contributed to this?
Next, AIG will be sending their eceutives on a much needed, all expense paid, vacation to the Bahamas!
Here's an idea for a reality show. Require each of the bonus recipients to appear before an audience of average citizens and to receive their bonus check in hand AFTER explaining to the audience why they are entitled to it.
In the short term, the AIG bonuses infuriate me...but in the long term, I am concerned that President Obama and his team allowed this to get by them. A proverbial ounce of prevention would certainly have resulted in several million pounds of cure. Now they are trying to close the barn door after the horse is gone.
wow... the narrowmindedness of some of these posts is baffling. the tax proposed is to recoup the money... how else would the public like to get the money back? the government has no standing to intervene in private contracts.. none. the only avenue we have to get OUR money back is to tax these bonuses. Obama haters- chill out, look at the big picture.
This people is the problem with these bailouts. People think that because we bailed them out, we can tell them what to do and how to spend the fund. If you apply that same logic to where the money really came from (borrowed from China) Then the Chinesse premier has every right to tell Obama how to run the country.
The solution is no more bailouts.
To go a step further:
If Bush's bailout policies were so bad, then why is Obama continuing the policypolicies, and in fact enlarging them?
Bush made things bad, Obama is making them worse.
But then again, why should we be surprised? The Democratic (of which Obama was a voting member) Congress and Bush just through money at bad companies with no specifications of how the money was to be spent.
Reid, Pelosi, Bush, McCain, and Obama are all ignorant suckers, and the American people are the ones who are going to suffer.
They knew about the bonuses before they gave out the bailout money. The stimulus allows all pre-agreed bonuses to remain, now the Senate is trying to make AIG out as the crooks. This bailout mania is snowballing and taking this country in a dangerous direction.
It was niave of individual Congressmen to think that they were influential enough to SHAME anyone on Wall Street into behaving appropriately.
Unfortunately the people working there pat themselves on the back when they get a check, no matter what moral, ethical, or legal crimes are committed to trigger the flow of money.
While only 1/10th of 1% of the bailout money, this action sends a message that GREED in the face of MONEY LOOSING INCOMPETENCE is not part of a CAPITALISTIC system.
Congress must remain PROACTIVE in every bill it writes to combat this mindset. It goes beyond the financial industry and into the Board room of every publically traded company on the stock exchange.
I'd like to see an SEC requirement that the "Annual Letter To Shareholders" must include a table which shows the Top 50 earners of:
Stock Granted & Excercised
Options Granted & Excercised
Finally, let's the (salary + bonus) divided by the annual earnings of the company.
This ratio will allow shareholders to compare the performance of executives from one company to the next. Those where this ratio is high will have to explain why thy are worth more, per dollar of profit, than the next guy.
Baucus wants to tax, but Dodd know they where going to get these bonuses gave AIG exemptions on these bonuses back in Feb and O sign it into law. I'm sure the rest of congress didn't know that AIG was going to do this. Oh wait that right these have been in place since last year. Does nobody read in congress anymore or did they know?
Well the Obama administration has its hands all over this and then feigns outrage to stir public opinion. Senator Dodd added an executive-compensation restriction to the bill. That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009,” Obama of course signed this into law. Last but not least, we know Geithner has been involved both in his position at NY Fed and now as Treasury Secretary. This makes Geithner a key figure in both the Bush bailout and Obama's. Now they are going to tax these bonuses after they signed off on them all along?