March 17th, 2009
11:38 AM ET
13 years ago

Senate to explore taxing controversial AIG bonuses

[cnn-photo-caption image= caption="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."]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."

Filed under: Senate
soundoff (67 Responses)
  1. Kevin in Ohio

    Love it....democrats very first solution is to TAX. Not surprised at all.

    March 17, 2009 11:41 am at 11:41 am |
  2. go a step further

    and don't give out these bailouts

    this is not a capitalist system that the republicans have started

    Bush's bailout is socialist, call it for what it is

    Obama, shouldered with Bush's bailout is trying to reverse the course of the disaster he left Obama and the course chosen by Bush, so another bailout was necessary

    But this has to stop, it is not healthy for our economy

    what a nightmare Bush was and is

    March 17, 2009 11:42 am at 11:42 am |
  3. New Day

    I say we release the names of every exec that took a huge bail-out and send the Paparazzi after them. A few weeks of being hounded should be plenty to shame them out of this behavior.

    March 17, 2009 11:43 am at 11:43 am |
  4. Ellie

    These FOOLS need to be FIRED, FIRED, FIRED!!!

    If this was any average citizen they would be in JAIL now. AIG needs to be knocked off it's HIGH PEDESTAL. The government owns 80%, so in a sense they need to START sending a clear message to AIG's CEO and the rest of AIG's Board.

    This is utterly ridiculous that this company is NOT even a bank and yet is allowed to run amuck with my hard earn dollars!!! PISSED OFF does NOT even begin to describe the sentiments of the American people who have been DEMANDING something be done about AIG immediately!!!!

    AIG needs a good "house cleaning".......along with a swift kick in the butt.

    March 17, 2009 11:43 am at 11:43 am |
  5. phoenix86

    Beware of taxes aimed at individuals for punishment or "fairness" reasons. This is unconstitutional, as these idiots in Congress should know.

    Unbelievable the stupidity of these guys.

    March 17, 2009 11:45 am at 11:45 am |
  6. no corporate politics

    "McCain and Obama collected $103000 and $82600 from AIG"
    source: Federal Election Commission

    We have to end the donations political candidates get from corporations. It is either lobby money or bundles / PACs (Obama).

    Only then can our government do what is needed beyond this "good talking to" the president and congress is doing.
    DNC / RNC = corporate stooges.

    March 17, 2009 11:45 am at 11:45 am |
  7. Dutch/Bad Newz, VA

    Take back the money anyway you have to. The AIG execs need to realize that they are no longer the sole owners of the company. The American People owns 80% of the company. If lawsuits come about for trying to take back OUR money, then let them come. Those execs need to realize that We, The People, don't mind watching them go under. Although their collapse will be the destruction of the economy, the need to stop taking our kindness for weakness. I'm glad t see that NY A.G. Cuomo issued subpoenas for those execs who recieved bonuses. Put them on front street and expose them!

    March 17, 2009 11:46 am at 11:46 am |
  8. The lonely Libertarian of Liverpool

    TAX Them? How about arresting them? Why is Stanford still not in jail?

    March 17, 2009 11:47 am at 11:47 am |
  9. demwit

    Yeah...., let's start taxing individuals based on...

    March 17, 2009 11:48 am at 11:48 am |
  10. Divsional Change?

    Wait – let's tax every benefit everyone gets and tax the businesses so they all leave – then the Socialist Democratic Leftist party will get what they want – the NANNY STATE of the USSA and they will be in power forever and ever.

    March 17, 2009 11:48 am at 11:48 am |
  11. David

    Better idea....stop the payment of them altogether.

    March 17, 2009 11:49 am at 11:49 am |
  12. Big Ed

    We, the government own 80% of AIG. Here's my suggestion – no additional money. Go in, dismiss the Board of Directors, fire the CEO, but a closed sign on the door and begin liquidation to pay back the government debt. I believe in a "hand up", not a "hand out". Time for the AIG foolishness to end.

    March 17, 2009 11:49 am at 11:49 am |
  13. Take their organs - sell them on black market

    Additionally, these AIG executives should be:
    1) fired from their posts;
    2) audited by the IRS;
    3) made to serve community service in soup kitchens or shelters that are providing services to people who have lost their homes and jobs, in exchange for the millions they have received from same said victims/tax payers.

    Oh, if we could also take a kidney from each of them, that would be great!

    March 17, 2009 11:49 am at 11:49 am |
  14. Tony L. - Atlanta

    This is political grandstanding. While I'm not a fan of bonuses for failure. I'm not a fan for emotional taxing of people either. Set this precedence and who knows what else we'll be taxed for – "doing better than the average worker tax" possibly.

    March 17, 2009 11:50 am at 11:50 am |
  15. RealityKing

    I generally use my bonus for the family vacation. I wonder how long before the Senate democrats decide regular Americans really don't need those either...

    March 17, 2009 11:50 am at 11:50 am |
  16. Belle1

    This would be funny if I weren't so angry.

    Christopher Dodd is the one that wrote the Bonuses into law. He is the Number 1 on AIG's Donor list.

    Who is number 2? Why, none other than President Obama, who VOTED FOR the law Dodd wrote.

    March 17, 2009 11:52 am at 11:52 am |
  17. Ed

    Why hold back to a potential maximum 90% tax rate? Go to 120% to not only recover the TARP funds that were squandered, nay, ABUSED by these crooks, but also to heap upon them penalties for the economy that they were paid to ruin!

    March 17, 2009 11:52 am at 11:52 am |
  18. KLS

    Why in the world do the AIG executives feel entitled to bonuses when they were responsible for running the company into the ground??
    Let them sue the American taxpayer's!!! What other ethical company would hire these financial idoits!!
    Too bad the original money given to AIG last September had NO accountability or stings attached. The American taxpayer is now paying dearly for that stupid mistake.

    March 17, 2009 11:53 am at 11:53 am |
  19. Ian

    The bailout money came from the taxpayers. The executives are spending some of that money on bonuses. The government is going to tax those bonuses. So does that mean that the money now belongs to the government and we will never see it again?

    March 17, 2009 11:55 am at 11:55 am |
  20. Scott, Tucson

    This is nothing more than legislative theft by Harry Reid and Chris Dodd. If f the democrats were to do this to the employees of AIG who have bonuses as part of their legal contractual agreement, than that will open the doors to them going after any and all earnings that we make. Lets say you earn 40K per year and get a year-end Christsmas bonus of say $1000, are you willing to cough up all but $100 for Obama and his tax hungry goons?

    March 17, 2009 11:58 am at 11:58 am |
  21. USAF Staff Sergeant

    Awesome. That's kind of funny.. 90% tax. AIG is out of control. How on earth did they think they could do this without anyone being upset.

    March 17, 2009 11:58 am at 11:58 am |
  22. Jimbo

    Why did the Obama administration not manage the bailout before it got to this point. It is Obama's fault as much as AIG execs. Come on Mr. Obama. Strart leading instead of reacting.

    March 17, 2009 11:59 am at 11:59 am |
  23. spring

    that's not enough, they need to give back all the taxpayers 80%, don't give them anymore stimulus money, let them go bankrupt, then if they can give their so called "SMART" people a bonus , then that will be JUST FINE.

    March 17, 2009 12:00 pm at 12:00 pm |
  24. Ty

    I wish I worked for a company like AIG, drive it to the ground and still make millions at the end of the year. I wonder if they're hiring. I can see how their annual review of employees goes:

    "So what have you done this year to make this company worse than it has been?"

    "Record loss profits!"

    "Excellent!. Here's your $1M bonus."

    March 17, 2009 12:00 pm at 12:00 pm |
  25. Sharon Kitchen

    With all the suffering caused.......all bonuses should be paid back with interest. Then the CEO's should be fired. No package plan given.
    Then all the higher paid staff,above the 250,000.00 mark should give back any and all bonuses/if they do not want to, then they should be fired.
    Clean house.
    The American people have had their houses cleaned away from them.
    These "fat cats" deserve a cell next to Madoff.
    All Corporate greedy people ........should feel the same pain.
    If they loose their way of life...........oh well.
    Their little homes will feel like a huge house, next to all the people now forced to live in tents/carboard boxes.
    Do not stop with AIG.......kepp on with all the Greedy CEO's wherever they may be,Insurance companies of all kinds/hospital/homes/car/,etc.....especially banks.
    Go after the money that has been put "off shore".
    Go after and tax the companies that have moved their companies to other countries. Only give a tax break "if" they come back to the U.S.

    March 17, 2009 12:01 pm at 12:01 pm |
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