sounds good to me

Don't f- with the treasury.

Everyone forgets they run the most efficient government department in existence. Say what you want about the IRS, they know how to get blood out of a stone.

So if these people let AIG break their contracts, can the IRS go after whatever award they get for the contract being broken?

the congress are a bunch of indian givers

So the government is going to impose new taxes on 10 people becuase it doesn't like it? Those bonuses were under contract and guaranteed by the stimulus bill. What about the bonuses to people from Freddy and Fannie?

Talk about a lot of political posturing. Let's stand up and send the IRS after these dead beats. While I don't condone what AIG did,We own 80% of them. So wouldn't this essentially the government sicking the IRS on itself??? This is nothing more than a politician making themselves look tough when they full well know that nothing will ever come of it. But it sounds good to their constituents.

What the hell... it's congress' fault that the bonuses got through in the first place. They had their chance to stop it. Why waste even more money on the IRS? The entire congress should be fired.

What a comedy of errors. It's no longer shocking, just hilariously sad. Hard to believe that AIG and our own Government are so inept at pretty much everything.

Our government is a bunch of jackasses.

Yeah lets send the criminals after the criminals!

I don't think 90% tax and a tax on 90% are the same thing. Maybe I read it wrong.

This is all just shenanigans. It can't be this disorganized in person, can it? If I were to walk into the Capitol today, would it be as much of a clusterfuck in person as it is when you read about it?

I love the graphic. Rar!

Good plan, shaky law. There's an argument to be made this constitutes a bill of attainder.

As Senator Baucus is quoted as saying in the article, I think the best outcome is to use the legislation as leverage to get the bonuses back, rather than try and actually enforce it.

The AIG bonus recipients will have to wait a while. The IRS is busy right now with Obama's cabinet picks and other appointees.

Capitalism is a 4-step loop:

Let's use the economy to solve our government's problems.

Let's use debt to solve our economic problems.

Let's use banks to solve our debt problems.

Let's use the government to solve our bank problems.

@PittsburghJen:

A buddy of mine works for the Dept. of Defense. He was telling me that one of the big budget people there is this lady who spreadsheets all the debit, credits, expenses, etc. Except she's "old school" and won't use Excel - they pencil it all onto massive ledgers.

She. Pencils. It. Onto. Paper. Ledgers. In 2009, at this very moment, inside the single largest taxpayer-expense-producing bureaucracy in America.

There is no such thing as government efficiency

@Daniel Kubik: I don't buy it. It's not a punishment specifically focused at a person, but a tax focused on a group- the group of companies receiving TARP money, and the people getting bonuses from those companies. The 16th amendment gives congress broad taxing powers.

Read it yourself- The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

Also, I don't think TARP receivers and those who ran their businesses into the ground are a protected class under the 14th amendment.

Question: Is the $250,000 supposed to refer to pre-bonus or post-bonus income? I don't know the numbers, but of the 73 people who received over $1m in bonuses, I bet the number who were paid over $250,000 in salary is much smaller.

Wow this is a dirty move by congress. Put yourself in the individuals perspectives. If you got a bonus that was promised to you would you give it back. Its not a performance based bonus but a retention bonus. The only reason congress is making a big deal of this is because the media reported this and it makes them look bad. They knew for months that they were going to give bonuses but did nothing about it. Now they are going to use the IRS to do their dirty work. What kind of socialist crap is this.

When Charlie Rangel and the rest of the Democrats start paying their own taxes, only then should they should start raising taxes...

And I can't believe how self-righteous Congress is when they missed the entire economic collapse as well! They had the opportunity to regulate credit default swaps and said no! They had the opportunity to regulate Fannie and Freddie and said no! They rode the bubble to the top, and helped inflate it, and now are saying they're the ones who can fix it! UGH!!!!

@Daniel Kubik: No, I don't believe it is a bill of attainder. It doesn't apply only to AIG employees.

They can try all they want. As much as I hate AIG, congress has no grounds to send the IRS after them or demand the money back.

1. It is "ex post facto" cause they didnt want to read their bill in the first place and prevent this and now there are trying to pull a mulligan.

2. Bill of attainder is also possible cause they haven't proven guilt in the court of law. Guilt or Innocence is not up to Congress.

These are both under Article I of the constitution. If they go this route they are just going to cost us more tax payer money.

and if they decide that neither of these AIG could also go after them for Breach of Contract. They had an amendment on the stimulus which states an exception for contractually obligated bonus agreed on before Feb 11 09.

I think the only chance for them to get this money back is to have the attorney general look for fraud in the statements that originally were sent prior to the "bailout."

The income tax is unconstitutional. The Supreme Court ruled that #16 granted the Congress no new powers of taxation. They didn't have the authority to tax individuals before the amendment, so they still don't have that power.

Also, you have to realize that the pay you get from your job is not INCOME at all--it's a barter. You trade your time and abilities for cash. Neither party has a net gain as would be the case for, say, a stock you hold appreciating in value.

@ ADismalScience: Wha...? You're absolutely kidding me - how is this possible in 2009? Why has no one sent her to a "How to Use Excel" community college class? What the eff is going on!?

Also, the "reply" button is still not working.

In Soviet America, Bonus gets You!

ex post facto only applies to criminal punshiments

So long as the law is sufficiently broad, it probably doesn't pose a Bill of Attainder problem. It seems that's what they're doing by applying it to ALL TARP recipients.

The Ex Post Facto provision only applies to criminal laws, thus it's inapplicable here.

To the guy who claims the income tax is unconstitutional: put on your foil hat, the government is listening to your thoughts.

I meant to provide a cite to my comments above, so here it is

[blogs.wsj.com]

Yay, Congress!

ADismal:

Or,

Establish a thriving mixed economy that's the envy of the world. Keep it expanding, with minor hiccups, for half a century.

Elect a Conservative, "Free Market" Republican majority in Congress. Elect a Republican President who's a creation of their basest, most no-nothing core.

Stew for eight years.

Let economy self-destruct in orgy of self-dealing, back-scratching and "free market", no-regulation excess.

* For chuckles, launch optional, preemptive war for fictitious reasons because we have over $3 Trillion and over 5,000 US lives to burn.

Turn record-setting budget surpluses to 10x larger deficits than ever held (created by previous GOP Presidents). Create policies that create massive capital balance deficits unheard of in modern history. Watch as value of $US plunges: the Loonie worth more than $1. The Loonie! In the largest, most vibrant consumer-based economy on the globe, make the wages of the lower 90% whither or become stagnant while allowing top 2% increase by a hundred-fold.

Ensure policies that facilitate ALL debt, allow multiple trillion-dollars-of-wealth destroying bubbles to firmly take hold, then explode. Tie together commercial and investment banking sectors at the hip, then let them engage in "self-regulation".

Watch as an entire, crucial financial sector becomes extinct, commercial paper markets freeze. Watch as commercial paper markets freeze!

In blind panic, let GOP leaders create blank-check, no reform, no-strings-attached trillion-dollar grants from taxpayers to suspender-wearing idiots who created this mess to begin with. Try to get provision that all actions by GOP leaders are beyond Congressional or Judicial review, oversight or transparency.

Turn over government to responsible leaders now tasked with undoing globe-threatening carnage.

(optional)
Bitch about how it takes longer than eight weeks to undo nearly a decade of trillion-dollar waste and malfeasance.

(mandatory)
Obstruct all attempts to put house back in order. Blame "The Government" instead of absurdly implicated, corrupted, false "Free Market" "Self-Regulated" ideology. Find minor lapses on other party members then use to blame said efforts to put out raging inferno that used to be a perfectly functioning, relatively fair, vibrant economy that was the envy of the world.

Wait ten years. Hope electorate forgets so the cycle can repeat.

:)

@Ryan Orman: Isn't arbitrarily raising a tax in the current year illegal?

For what it's worth, every job I've ever worked at that featured bonuses (god knows they were never as large as the ones given to AIG, of course) put *heavy* takes on my bonus pay. Fair's fair, Wall Street.

Can someone please explain how this law would be Constitutional? Or is it just symbolic/grandstanding.

Isn't it illegal to pass a law to regulate the past? (e.g. Ex post facto laws prohibited by the 9th amendment)?

@discordance: Oh yeah, bonuses are already taxed out the @$$. My partner gets a "raise" every year but they stick it into their paycheque as a lump sum bonus rather than an hourly increase, so it immediately disappears due to tax. Yay.

@FrankGrimesJ Oops, sorry. Got my answer.

And I guess the tax code is pretty roundabout and circular anyways. The gov't could probably find a way to re-tax my 2002 wages, if they wanted to bad enough.

The fact that gevernment now thinks it can do whatever it wants to fix it's mistake is more disturbing then the fact that all this happend to begin with.

@SpaceBat_GitEmSteveDave: The short answer is probably yes. A handful of constitutional scholars have argued that it would be a bill of attainder, but I don't think so. Clinton retroactively raised a tax rate, IIRC, in 1993 and it was held to be constitutional.

It's not that the bonuses would have been tax free to start with; it's just that they would have been subject to tax at the usual federal rates for ordinary income. The bills that I've seen slap on an excise tax to bring the rate up to either a total of 70% or 90%, either on the recipient or split between employer/ee.

@couldberunning: Sorry, but Laurence Tribe -- who's forgotten more about conlaw than you're ever going to know -- disagrees with you.

@thebluepill: Wolverines!

@ADismalScience: Holy crap. I can only wish you've made that up.

@Eyebrows McGee (on Twitter: LPetelle): agreed! :D

@PittsburghJen: I guess direct reply still not working for you?

You know, if we would have let AIG reorganize under bankruptcy law, they would have been able to modify the contracts that directed them to pay those bonuses.

However, because they took a government bailout instead, the contracts still stand. Although it sucks that AIG paid those bonuses, they really were probably contractually obligated to.

And they really were a very small expense compared to the amount of abilout money that AIG got. It's really not big news. But once we people hear millions, and billions, and trillions, it all sounds the same, doesn't it?

Really, those who received the bonuses should return them voluntarily. But they should be under no obligation to. And I bet that this new "tax", as proposed by the congress, if it passes, goes through years of court wrangling.

It's just not right to legally take 90% of what someone rightfully (if not morally) receives. It's reprehensible to put a 90% tax on anything.

I appreciate the effort, in that they're trying to make right what they originally f'ed up, but I wish they would put their effort into the future. What can we do to prevent this happening again? Changing the rules after the fact might be popular in this case, but isn't really indicative of a law and order society. Unless AIG broke a law. IANAL, did they?

OK, for all the 'Congress bashers'... at least get your facts straight.
a) Treasury and Fed made the deals and 'informed' congress of them. Since then, Congress has imposed restrictions on the blank check the Treasury gave these companies.
b) Congress, even when it does impose restrictions and rules, is not the administrative or enforcing body. Does anyone out there think Congress is running AIG or BofA?
c) The government is not some hegemonic entity. Even the Executive branch has many departments. So complaining that siccing the IRS on AIG is biting itself in the ass is just stupid. Even if the government were merely a stockholder (and 80%), it is not on the board and has to act through stockholder action. Stockholders can demand companies do whatever they want, break contracts, sell divisions, fire executives, rename the company A**holes Infecting Government.
d) Couldberunning, grow up and stop spouting the ultra-retarded nonsense that tax evaders have been trying since 1790. The government can and will raise taxes despite whatever rarified reading of the constitution you choose to subscribe to. I comfort myself with the knowledge that tax evaders normally wind up paying more taxes in the end due to heavy penalties. So go ahead and be that way. Pay more of my share.

Regarding AIG in particular, I think this is just the injection of outrage the public needs to allow congress to act on hedge fund managers and others making unspeakably outrageous amounts just because they move even more outrageous amounts of money around.
I'm no socialist. I'm a strong believer in capitalism, but the notion that capitalism is more perfect than democracy, which has many safeguards, watchdogs, checks and balances, and other mechanisms of correction is the truly un-American view.

This sounds like an ex post facto law to me. Nothing like ignoring little things like the Constitution!

@infinitemonkeys:
You're not entirely wrong, but c) does have some errors. Stockholders don't have the power to force the Board to do much. They can propose and pass non-binding resolutions, but the board can just say "Ok, now piss off" and ignore them. The only recourse is for the Stockholders to kick out the board, and put in an new board that is more likely to fulfill their wishes. Even with a unanimous Stockholder vote, the Board can't be forced to do much of anything other than leave office.

Those in congress that approved giving billions to AIG with no oversight, no guidelines and without even reading the legislation they signed are now a bunch of pandering creeps "showing their outrage". Please. Do us a favor and quit the congress right now. Do the right thing for once in your pandering life.