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."
If the contracts state that a bonus should be paid, then the bonuses probably have to be paid (or AIG faces possible legal action from execs expecting the bonuses). However, those bonuses should be paid from AIG funds, not from the bailout. Where would AIG have found the bonuses if the bailout had not occurred? How would those bonuses have been paid if not with taxpayer monies? Those are the questions AIG needs to answer. If AIG cannot afford to pay bonuses without taxpayer dollars, then AIG needs to take the "hit" on the legal issues surrounding the executives' contracts as well.
90%? How about 100% and make good and sure it can't be wiggled through some loophole on next year's tax returns.
How shameless can people be? Their "company" is already on the public dole, the only reason they still even have jobs - and they want personal handouts to boot.
Here's a novel idea. Cut the salaries of every CEO and high level exec in this country to not more than 20x the pay of their highest-paid employee. Not enough? Then feel free to go somewhere else if you think you can get more. Heard that before? That's what they've been telling YOU for the last 20 years.
Memo to the overpaid God-complex execs in this country: YOU CAN BE REPLACED. Should be plenty of smart young people coming out of business school who'd be happy to take your jobs. They want the opportunity and haven't developed your entitlement mentality yet.
I know the bonuses are annoying, but this seems like a particularly dangerous precedent.
Let the perps take their non-deserved bonus, and take 100% of it under the "stupidity" tax .
The administration KNEW about these bonuses THEY KNOW the loopholes.
WAKE UP America the outrage only started WHEN THE MEDIA STARTED TO REPORT ON THE BONUSES.
Fake outrage by the white house pathetic and OLD POLITICS not new or change.
When will Americans wake up and see how their faith in this administration is being used for selfish political proposes and for the benefit of a small powerful few.
The last eight years is continuing but only with a different cast (in some cases) of fools.
I have faith Americans will see it sooner than the last time.
I don't understand how can bonuses be paid out when they did not do the job they were hired to do? They should not receive any money was it not within the contract if they did not deliver no bonuses would be paid? STUNNED
If working people don't do the job they were hired to do, no bonuses are paid and most likely will not have a job to go back too.
once again STUNNED
Who wrote the part of the bill that says they get to keep their bonuses?
hmm.. who was it?
Oh yea it was Dodd.
Don't you people ever read and understand the truth??
@ Kevin in Ohio
Would you rather they make no attempt to recoup the money? I bet you'd love that since it would be an even worse position for them to take...just keep in mind though: the GOP voted for the bailout and the GOP's retard in chief ran the administration that handed out the money with zero oversight. Fact is, taxation is the only way to get it back. They're simply using the tools available to them.
Capitalism at its best. We deserve everything that we get. A great accountant or manager is judged by how many loopholes he can find to gain a profit. Money is the root of all evil and it will forever be the downfall of the United States of America. The self proclaimed Christian nation...please... Nothing we do abides by the rules located in the Bible, because our rules are located within our currency.
Our government is corrupt because it is ran by human beings. Humans are weak for power and self love. Everybody has a price and every man can be corrupted for the right price. Capitalism...
The same idiots that gave away all the money without strings are now complaining that the money is not be used as they want? Gee, I wonder how we got in this mess to begin with?
We need to fire all the politicians! No more incumbents! Throw them all out, like the garbage they are.
AIG can say that its in the contracts and that legally they need to pay them, but its not their money to pay bonuses, that money comes from the bailout fund and taxpayers... i thought bonuses were based upon exceptional performance? how can the people who made such a mess actually qualify or expect a bonus? they should consider themselves lucky to keep their jobs. =)
NO MORE BAILOUTS AND NO MORE STIMULUS! The US and Canadian governments have proven to the people that they are incompetent in dealing with these issues. Let AIG and all other "too big to fail" corporations fail as the market is trying to do. Thanks, but we'll take our chances and save us, our children and grandchildren trillions of dollars in taxes. It's a no brainer!!
Who was it that put together the original bailout under Bush? Oh, yeah, it was Geithner.
Who was it that put together the bailouts under Obama? Oh, yeah, it was Geithner.
Geithner, the only man Obama thought could do this job, is the one responsible for the fact that there were no provisions submitted with the bailout bills.
A Democrat-controlled congress p@ssed the bills without adding any provisions on the bailout money. Obama signed them without suggesting they be rewritten to include provisions.
But the majority of posts on this blog are still blaming Bush...and yelling about greedy CEOs.
Does anyone ranting on hear know that not all the "bonuses" went to overpaid executives? Sure, some of it did, but the pitchfork and torch crowd aren't even interested in finding out more facts before jumping on the cl@ss-warfare wagon. This 90% tax will end up affecting people who make less than $250,000 and Obama promised that was not going to happen.
i like your comment go a step further. this why we need to be socialist!!! because we aren't responseable for our action and we need the goverment to take care of us because we are to stupid to. so bring it on Obama and blame it on someone selse itis the American way.
I would love to make sure they all get fired and all of the money is returned, but if this is the only legal action we have, then I'm all for it! I also agree that the names of all these execs should be made public.
All of our fighting about who's fault it is/was isn't helping us either. Both dems and repubs were part of this AIG mess.
Nationalize AIG now and fire all who took a bonus and the CEO. Also tax the bonus at the highest rate allowed by law. These people sent this company down and need to go, not be given a bonus for poor performance.
It's going to be extremely hard to pull this off in a Constitutional manner.
Hordes of people should gather in front of AIG with protest signs in hand while making much noise.
The fake and contrived outrage from the white house and THOSE THAT WROTE the bailouts is disgusting and pathetic.
Don't look at how incompetent and usless my administration is look at how incopetent those fools are.
POLITICS AS USUAL and NOTHING NEW AGAIN.
I just can't wait to see the republicans rise up against interfering with the private sectors bonuses. After all, gouging the public and the government seems to be the republican's god given right.
Show us your true colors boys and continue to obstruct the Democrats that are trying to fix the economic mess you republicans got us into.
AIG isn't a government run organization. Why is the government involved at all?
Just to preface, I make 14$ an hour and was recently unemployed for 3 months: The bonuses to these guys do not bother me at all. They got where they are through there own efforts. Good for them. People would argue that these guys "ran the company into the ground and put the economy where it is today". That is very nieve... How is this any different then the "Bailout" we are providing to people who picked up mortgages they couldn't afford?
Yes, but will anyone really follow thru? So much talk and sometimes so little do.
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.