AIG: If You Can't Beat 'Em, Tax 'Em

There are dozens of ideas floating around out there on how to punish AIG for the impending payment of $165 million of U.S. taxpayer money in executive bonuses. Tar and feathers have been mentioned. The New York Attorney General has issued a subpoena, something usually done only for criminal misconduct. Team Obama is jawboning like crazy. The problem is, the bonuses are going to get paid, regardless of subpoenas, jawbones or tar and feathers.

So the Administration and Congress needs to do an Al Capone on them. If you can’t nail them for bootlegging and murder, pin a tax rap on ‘em. Better yet, do it in such a way that it is unfairly retroactive and puts AIG in a box from which they can’t escape without knocking down the entire string of dominoes.

The most satisfying solution at this point would be for Congress to pass legislation enforcing a 100% tax on monies paid out in executive bonuses in companies which have accepted TARP funds. If the companies have a problem with that, let them return the TARP funds and go ahead with the bonus payouts.

Sure, it’s unfair, being retroactive and all. Sure, it will probably get overturned some day in a U.S. Court of Appeals ruling, or perhaps even a Supreme Court case. In the meantime, it will give the nation’s taxpayers a good feeling, and will mute the howling mob long enough for us to enjoy March Madness.

Disclosure: No position

Comments

[Keith Lau:]

Announced those executives who received bonus as National Enemies.

Mar 18 06:15 AM

[TJ Schoenlein:]

I agree.. there is more then one way to "skin" a cat.. tax them to the max! Sure it's not fair, but life is not fair. Each time I look at the value of my AIG stock .. yep life is not fair folks.

Mar 18 07:34 AM

[davesilb:]

Tax them to the Max!!! Taxes can be made retro active they have been before. While at it pass a law that would keep any top executive from any financial institution from going to work at another financial institution for two years if there is any chance of them using their knowledge of former employer to help new employer or hurt former employer. This will eliminate the need for these ridiculous bonus's. If some court system tries to undo this use the means to remove the justices themselves. If they cann't find a way to do that then limit the terms justices can serve and make it retroactive!!!

Mar 18 12:07 PM

[jwysocki:]

How about paying them with the toxic assets that they created at face value? It solves two problems at once.

Mar 18 01:22 PM

[Gedankonomist:]

The government should not have bailed out AIG in the first place.

But since AIG is a CFR (Council on Foreign Relations) corporate sponsor, and about 1/2 of the 3000 CFR members are in government, it should come as no surprise that AIG did get a "bailout."

Now that the damage has been done, the government should not make the damage worse by further continuing to meddle where it has no business meddling in.

Mar 18 01:30 PM

[Chancer:]

I am all in favor if we also tax away the net worth of Barney Frank and Chris Dodd, who are more repsonsible as individuals than anyone else for getting the nation into this housing mess.

Mar 18 01:37 PM

[henarl:]

Works for me!

Mar 18 05:03 PM

[a. palmer jr.:]

If you try to game the system don't be surprised if the system tries to game you back!

Mar 18 05:48 PM

[the_lazy_ob...:]

I say: PUBLISH the names of those who did NOT return the bonuses. And for those who grabbed the bonuses and LEFT the company (when the bonuses were supposed to be given to retain them), I say publish their ADDRESSES as well.
I'm sure there's nothing on those contracts against making the recipients' information public.
With their millions, I'm sure they can afford to hire bodyguards -- preferably the unemployed Blackwater mercenaries.

Mar 19 07:25 AM

[paul:]

This has to be the best example of "two wrongs don't make a right". The first mistake was bailing out AIG. The second mistake is to void employment contracts of people that were hired to meet goals and met them. Now all of the class envy people want to void their contracts.

Mar 20 02:32 PM