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The Bonus Tax: The Redistribution of Both Wealth And Talent

If you want Facism, look in the rear view mirror. Facism is shredding the First and Fourth Amendments in an ill-defined "War on Terror". Facism is committing extreme rendition on American citizens. Facism is the right to go through anyone's emails, phone conversations, etc. on the suspicion of it being related to terrorism.

Even a staunch conservative like Bob Barr had enough of the putrid actions during the previous Administration. His performance during the much-too-late Impeachment inquiry last year spelled out in exquisite details the Facists who almost managed to destroy this country.


On Mar 22 10:31 PM User 187593 wrote:

> This situation is not humurous--it is facisist. Congress is doing
> nothing less than targeting a specific group group for persecution
> (banking employees) just as the Nazis targeted jews. The reason
> I say employees is that the test is household income, not individual.
> Imagine a $40,000 secretary who received a $1,000 bonus, who is married
> to a $210,000 non-TARP company executive. That secretary willed
> be taxed at 90%. IT'S NOT JUST THE FAT CATS!!!

The Bonus Tax: The Redistribution of Both Wealth And Talent

So, what's new with these tax cheats and persons that have enough money to hire tax cheating lawyers?

Any wonder why the average Joe is outraged? While the wealthy shelter their income through "legal" and nefarious means such as foreign "tax havens" offshore accounts, shell businesses, and illegitimate deductions posing as business expenses, the working stiff paying his/her honest taxes for an honest wage looks that who gets rewarded under our current system and who gets the shaft.

1. Reinstate Glass-Steagall. None of these shops (Citigroup, B of A, etc.) should have ever been allowed to dally in businesses about which they knew nothing. AIG has (had) 111,000 employees. It's an insurance company. How can it effectively manage its core business while allowing these geniouses to manipulate the financial markets with CDO's and CDS's?

2. Eliminate bonus structures altogether. Why are salaried employees and small businesses hit time and time again, while big business always seems to 'bend' the rules and still come out on top? Think of it this way, if I’m an average corporation and I pay a qualified employee 100k as their salary, I am required to withhold taxes, insurance and a host of other items – in addition to setting aside money for federal programs. However, if I pay that individual 60k, and a bonus 40k, the situation looks much better. The employee has to handle withholding taxes on the 401k and I am only required to deal with the payroll effects of 60k.

3. Fix the tax code. Just a few examples:

A. Our effective cost per gallon of gas is ~$10.00 when one factors in the roughly $30 billion dollars in tax subsidies ANNUALLY provided to the oil and gas industry. This is the most egregious, downscale tax imaginable. Moreover, the oil and gas companies simply need to bid and secure future leases and INTENT to drill for the largess we reap upon them every year. This ponzi scheme against the American taxpayer is one of our dirtiest tax secrets.

B. Add to that tax subsidy the protectionist import rules on sugar, milk, etc. Removing sugar tariffs alone and replacing this supply with a much more efficient cane sugar ethanol source could end the corn producer/fertilizer manufacturers stranglehold on the taxpayer's neck.

C. For people who don't count the payroll, FICA, SUI, etc. automatic worker payroll contributions while conveniently ignoring the "bonus structure", offshore accounts, shell businesses, and other manipulative uses of the tax code by those who can afford tax attorneys, don't be so quick to condemn the extra pittance through earned income tax credits, adjusted rate schedules for wage earners and such put into the pockets of those who actually contribute a day's labor for a fair wage vs. the incredible sums paid to those who move money through the system. Look where that system of rewards has put us.

C. Finally, would someone please explain to me why there is a ~$106 K cap on wage contributions to Social Security?

While we are all arguing about the validity of the clawback option, we are missing the larger point of just how egregiously the average Joe has been pummeled by a tax system that redistributes wealth from the working middle class up to the 2% Captains of America that continue to rape this country and its resources.




On Mar 22 03:35 PM Rob Viglione wrote:

> Increasing political hostility to wealth and productivity will have
> dire long-term consequences. Many people I know are actively getting
> capital out of the country, while others develop escape plans for
> themselves.
>
> This is not the America we have come to believe in. The social contract
> with our government is fast eroding.

The Bonus Tax: The Redistribution of Both Wealth And Talent

Perhaps you missed the news item reporting that 20% of these "retention" bonus babies left the company AFTER they got their bonus money.

Still comfortable with AIG?

Actually, your point is well-taken in one sense. This isn't about bonuses paid to a batch of AIG FP geniouses. What this sorry episode has exposed is the incestuous nature of our economic structure. Merrell takes the B of A (taxpayer donated) TARP/Fed-structured buyout and pays BILLIONS in bonuses. AIG takes TARP and pays off BILLIONS to Goldman, Morgan and others sitting on their insured obligations that the worthless AIG'ers wrote.

This madness will only stop when we admit that w/o TARP and TALF money, these financial giants would be bankrupt midgets sitting on worthless assets enough to torpedo the companies should they ever write down those assets.

Nationalize the financial industry, GM, GE, and every other company that has brought this ruin upon our country!


On Mar 22 10:23 PM User 187593 wrote:

> AIG bonuses were not based on performance. They were retention bonuses,
> paid solely on obligation to stay on the job and perform during 2008.
> Since the affected employees stayed throughout 2008 they deserve
> the benefits of their contractual commitments, which they fulfilled.
>

The Bonus Tax: The Redistribution of Both Wealth And Talent

The article is almost as humorous as most of the comments.

The one who wrote the violin music about the porr financial guy who has a bunch of unredeemable stock options, a taxed salary (OMG!) and a bleeding Grandmother lost in Europe was better than the afternoon soaps.

Let's get real folks. What these guys do, in the list of TARP companies provided in this article, is literally move money around for their living. Where's the equal outrage and concern for the working stiff who is now supposed to renegotiate his union contract to spare the poor Detroit idiots?

I for one am sick and tired of hearing the outrage over confiscation of ill-gotten gains while the smart people who populate this site can't seem to realize that the role of the financial sector is to provide capital for people who actually produce things.

The problem with our economic contstruct is that we are not doing enough to right the wrongs of a failed, simplistic, silly policy direction that we have suffered through for at least the past thirty years.

The introduction, ascendency and idolatry of Milton Friedman's brand of shock economics has done more to destroy the world's economy than any economic hypothesis in our lifetime. This is not just Reaganomics /Bushanomics, but the pitting of haves/have nots in a global play orchestrated through Milton's disciples within the IMF, World Bank, and governing neo-conservative world view since at least 1975.

Cutting taxes on the wealthy and re-distributing middle class income up to those captains of industry combined with wholesale deregulation and record deficits under Reagan, Bush I and Bush II, and conveniently leaving the $1 Trillion dollars of Iraq war spending off the books while the national debt ballooned from around $5 Trillion to $10.6 Trillion at last peek is an ingenious spin on what constitutes supply side stimulus, if not outright delusion.

Count the change left in your pockets, unless of course you are one of the few who benefitted from this latest episode of Shock Economics so popular with necons. I'll just ask you the same question Reagan used to ask: "Are you better off now than you were four years ago?"

If you're in the same boat as the rest of us, our "staying the course" has undeniably run the lot of us aground. If you have benefitted, then you're one of the lucky 2% that control 80% of America's wealth, completely comfortable that you'll ride out the storm until the next lunatic can covince most of the people all of the time into something completely counter to their own self interest.

Can Capitalism Survive Its Latest Entanglement With Socialism?

If you are really Jim Carey, get off your lazy duff and read the book.

It makes the most cogent argument possible of how the influence of Friedman and the Chicago School led us down this yellow brick road of fairy tales that pumping money into the hands of the wealthy, getting rid of all regulation and letting the market work would trickle down to all the peons.

Friedman even had a recipe for how to institute this radical, dangerous idea. He called it Shock Economics, using times of war and natural disaster to institute his policies while the country was literally in shock and looking for leaders to guide the country.

The Shock Doctrine details that path much better than any summary argument I could make. It is a cautionary tale far beyond the pseudo-economic opinions of me or anyone else that pretends to be an expert.

Can Capitalism Survive Its Latest Entanglement With Socialism?

Read Naomi Klein's "The Shock Doctrine" for the clearest explanation of The Mess.

For all you Milton Friedman addicts, der Fuhrer has been stripped of his clothing.

Can Capitalism Survive Its Latest Entanglement With Socialism?

TO Michael Z:

We either believe in capitalism or we don’t.

We will have displayed a pragmatic solution well within the parameters of capitalism.

While I agree with your conclusions about a proper rescue plan, maybe it's time we take a sober look at the fundamentals of the U.S. credit market. Everyone seems to admit that short-term lending to fund long-term investment has left us with a frozen credit market -- with lenders unwilling and sometimes unable to extend credit to other lenders.

There is another alternative, though I am sure that it will be frigthening to red-blooded capitalists.

Rather than beating around the bush by slowly nationalizing companies through the AIG model, take that $700 Billion and create the Bank of the United States of America. At a modest leveraged ratio of 10:1 the following would happen:

Begin lending to all of the credit worthy borrowers in the US that can't get credit from all of these crippled, dying banks -- with an equity stake of course, so the US taxpayer can get well after this crisis is over. Or let there be a reverse auction to find the 200 or 1000 strongest banks in the country, with the cleanest, strongest balance sheets, in each region, and inject equity capital into them. Congress ought to like that, since the most effective way to short circuit the recession would be to identify the BEST banks in each district, and inject $700 billion dollars worth of equity capital into them.

How to Spend $700B and Actually Solve the Problem

Couldn't agree more with the solution proposed by this article. Also, couldn't agree more with its political expediency as the main fault of the proposal. Also couldn't agree more with Tom B's analysis of the nearsighted Scrooge in the root cause.

So, where does that leave us? With a bunch of impractical and/or unpalitable "solutions" to the imminent crisis.

So,where are all the "capitalists" when we need them, salivating at the risk/reward opporunities? Why do we need government intervention is this supposedly "free market" of ideas and the homespun crap that we so often hear from "free market capitalists"?

All so strangely silent and willing to accept Paulson and Bernanke on their knees begging to save their Wall Street buddies.

Can anyone remember the last time that Paulson was on his knees?