Bonus Tax

Krieg

I wonder if the House of Rep ever has read the Constitution. Does anyone realize up there that this bill that was passed is 100% against the Constitution. Here's why:

That would be because of one pesky little clause found in our (once) supreme law of the land.
Article 1, Section 9, Clause 5 - United States Constitution
"No bill of Attainder or ex post facto law shall be passed."
Do you know what that means? The key is the word "attainder." Let's go to Websters: It's a 15th century word meaning "extinction of the civil rights and capacities of a person upon sentence of death or outlawry usually after a conviction of treason." A definition, this one from the Catholic Encyclopedia, describes "bill of attainder" thusly: "A bill of attainder may be defined to be an Act of Parliament for putting a man to death or for otherwise punishing him without trial in the usual form. Thus by a legislative act a man is put in the same position as if he had been convicted after a regular trial."

They are trying to deprive some individuals of property that is rightfully and lawfully theirs without accusing them of a crime and without the benefit of any trial ... except, that is, for this trial that has been taking place in the media for the last week.
According to the Constitution, an individual can not be deprived of life, liberty or property WITHOUT DUE PROCESS. This isn't about whether or not those people deserved those bonuses. Perhaps not. But the bonuses were paid pursuant to a legally enforceable contract. The property is there's. Now we have politicians who are trying to take it away just because they're unhappy and embarrassed because they didn't take care of this little problem before the bailout money was paid.

dutyje

I don't believe that this tax is saying that the money was obtained illegally, so I don't really see where that applies. And no, there is no contract verbiage stating that the individual is entitled to those bonuses.

laker1963

I have been following the discussion about the AIG bonuses and I don't understand why there is ANY arguement at all. Let me put my spin on this...

If the government had not stepped in and granted some of the bail out money to AIG, what would have happened ? AIG would have eventually defaulted and would cease to exist ? I hope I am right on that because that is how I understand it. That would mean not only would an AIG employee not get a bonus they would be looking for work.
So now along comes the government and offers this bailout to AIG so they can continue in business.

Where in the world does ANYBODY get the idea that after this money was handed over that it was business as usual for AIG? This would be a very irresponsible position for the government to take, because if AIG were to continue with the practices that got them into so much trouble, one can only assume that they would end up in trouble again some time in the future. With the financial crissis being what it is that "future" would be a lot sooner then many may think.

So my point in all this is that, the government is NOT on the hook for this bonus money and AIG and its employees should be told that there IS NO BONUS MONEY to go to ANYONE !!!
If you tell someone that they will lose their bonus for that year but they will continue to be employed, then that person if they have any intelligence would be OK with that. (particularly in the present situation) I mean where else are they going to go?
Which brings me to my problem with the reason AIG gave for handing out these bonuses. RETENTION... why would you have to pay extra to retain someone, who in the present crissis could not just take their skills and go work somewhere else?
Finally, can someone show me where in law the government does NOT have the right to say that this is NEW money intended to keep the company afloat and that there are conditions placed upon the acceptance of that money, even if that clarification comes after the money was given?
The employees of AIG may be very deserving (NOT) of that bonus money... but nobody out there will ever convince me that they are entitled to it from the taxpayers, and so if AIG has financial problems and has to cancel the bonuses for a year or two (or forever) that does NOT mean that taxpayers have to step in and pay these people. That is just so ludicrus. IMO

PuroFreak

You are pretty much correct in the way you understand it except one thing, the government is partially on the hook here because this issue was brought up when the bail out was being drafted. Several members of congress mentioned that they needed to limit the money that can be given out in bonuses, but other members of our brilliant government pressured them NOT to put it in there. *cough cough* Geithner *cough cough* TAX CHEAT *cough cough* Welll it was either him or Dodd... The way they are fighting back and forth it's hard to tell at this point. AIG should not have paid these bonuses from our tax money AND the government knew these bonuses were a possability and did nothing to prevent it.

IMO the company should have never been bailed out... But many people would disagree...

phobicsquirrel

pretty much got that one on the head laker.

Krieg

PuroFreak:

You are pretty much correct in the way you understand it except one thing, the government is partially on the hook here because this issue was brought up when the bail out was being drafted. Several members of congress mentioned that they needed to limit the money that can be given out in bonuses, but other members of our brilliant government pressured them NOT to put it in there. *cough cough* Geithner *cough cough* TAX CHEAT *cough cough* Welll it was either him or Dodd... The way they are fighting back and forth it's hard to tell at this point. AIG should not have paid these bonuses from our tax money AND the government knew these bonuses were a possability and did nothing to prevent it.

IMO the company should have never been bailed out... But many people would disagree...

Maybe the all "knowing" (ha ha) Government should have actually READ the bill before they pushed it through...anyways...my point to the original posting seems to have gotten lost...my point was not the fact they got bonuses, it was the fact that the Government is now targeting individuals. Don't get me wrong here, I don't think they should have handed out bonuses either, but a contract is a contract. They shouldn't have used tax payer dollars to pay the bonuses and if they couldn't afford to pay it in the first place, they should have worked something out, but the thing is, if the Government decides they don't like you because of public opinion, what would keep them from coming after you? Taking your property away without due process?

also- the bonuses at AIG are just a small percentage of what was paid out, I am more pissed off about all the BILLIONS that were giving to EUROPEAN banks...so now the US Taxpayer is bailing out Europe?

dutyje

Krieg, these bonuses are NOT part of their contract.

Also, AIG is not the only company affected by this new tax. Bank of America is affected, too. So are a few other institutions (Citi? Wachovia/Wells?)

PuroFreak

I hate to dispute you here because we do agree in principle on this issue, but some of the bonuses were in the contracts for SOME of the execs with AIG. Not all of them were but some were part and their employment agreement.

blazer

Let’s see if I have this straight… Congress hands out bail-out money to save the world. Included are companies like AIG. Treasury Department negotiates with companies and influences how Congress should write the bill and influences the language of the bill that hands out free money… to save the world. Senator Dodd has an amendment stating “Contractual obligations before Feb. 11 are NOT affected by the bill’s restrictions” on what the money, … tax payer’s money, our money, is used for. Bill is voted on and passed. That is the BILL IS VOTED ON AND PASSED! That is the CLOWNS on the hill VOTED on it… and said that “this is a good bill” as is evidenced by virtue of “our vote for it” and that AIG could honor pre Feb 11 contracts. AIG honors pre Feb. 11 contracts. Public goes NUTS because … that’s our MONEY! CLOWNs on the hill make it look and sound like AIG swindled them and stole the money that Congress said, in the bill, that AIG could use … for what they used it for. AIG did not write the bill. No one at AIG can vote for the bill only the idiots in Congress had the power to do that. Is it not obvious to everyone that Congress and the Treasury and the current Administration have all acted incompetently! That ALL, who voted for this, are irresponsible, negligent, and reckless in their obligations. That Congress and the Administration are nothing less then down right foolish in their duties. Is it not more obvious that at this point, under their leadership, doing nothing and letting the free market run its course is far less dangerous, and far more productive then any remedy that this circus can possibly produce? Folks it’s amateur hour in Washington! Do I want AIG to use my tax dollars on retention bonuses? NO! Preventing this, however; was Congresses’ job, the treasury’s job, PRIOR to handing out US Tax payer’s money. This WAS NOT DONE! Now; the only thing worse then a reckless, incompetent government, which we now have, is one that can not be counted on to deal in good faith. A government that makes agreements, contracts and bargains and then reneges on them is a dangerous thing. A government wherein officials change the rules in mid course and retroactively go back and change regulations that they themselves set in place and threaten and intimidate citizens who get caught in between changes is outrageous! I have not heard one member of our government acknowledge that this entire mess was the fault of the law makers. Instead what I have heard is an endless rant from Washington attacking citizens who did just exactly what congress authorized them to do. Folks we are transitioning well beyond amateur hour and rapidly moving toward some type of regime that operates unchecked, unanswerable and drunk with notions of power while lacking at the same time in every measure of duty. These clowns MUST go. Any and all who voted for this MUST go! Any and all who voted for a retroactive Tax must go. They are a gaggle, of liars and thieves and bullies that if left in power will evolve into destroyers and tyrants. Scott V. Evans Jacksonville, NC

dutyje

That is true, Puro.. there are some execs with wording regarding the minimum payable bonus. I put verbiage into an offer I was tendered with Wachovia a few years ago, as part of our negotiation. When I went to B of A, I eliminated the "bonus" concept altogether from my compensation and rolled it into my base salary... I still get bonuses, but now they're actual bonuses -- money beyond what I would normally expect. Most of the other bank associates plan on getting their bonus, because it is expected. There are exceptions to many contracts, but as a general rule, a "bonus" is just that, regardless of the employee's expectations. Laker's point about "retention" is really on the money (pun intended) here.

gmill880

Am I understanding the 90% bonus tax that just passed the House...anyone making over 250k any bonus they get is taxed at 90%? Is this talking about anyone any industry or just companys taking Govt. money/bailout ?

urbino

Just the companies getting $5bn or more in gov't bailout money, I think. Not that it matters. Sounds like it's probably both unconstitutional and unpassable in the senate.

Luko

Interesting side note, did anyone see that Chris Dodd completely lied about this AIG bailout. He weakened a provision in the stimulus bill that would allow companies like AIG to pay out these bonuses. But he said on CNN he didn't, untill it was proved he did. Then he admitted he did, because the Obama Administration asked him to. And, not surprisingly, he's Congress' top recipient of campaign donations from AIG.

Aint that a mother...

This is the type of *** that makes me think you BOTL who are calling for revolution might be on to something.

dutyje

urbino:

Just the companies getting $5bn or more in gov't bailout money, I think. Not that it matters. Sounds like it's probably both unconstitutional and unpassable in the senate.

In what way is this unconstitutional? Another great thing about our system is that the checks and balances (specifically, in this case, the judicial system) are designed to prevent something such as this from happening. If it is unconstitutional, and does pass, seems like almost a slam dunk for the Supreme Court.

urbino

From what I'm hearing, it's likely to fall in the category of an ex post facto law. Personally, I don't quite get that, since they aren't making anything retroactively illegal; they're just adjusting the rates at which taxes will be levied on this year's income. But, then, I know nothing about the case law on the ex post facto clause, so I'm taking the supposed experts' word.

dutyje

I believe that only applies in the case of criminal law, not tax law. If that is not the case, wouldn't Bush's retroactive tax cuts have been technically illegal then as well? Also, since these changes apply to the current tax year, could either of those even be considered a retroactive tax change?

gmill880

dutyje:

I believe that only applies in the case of criminal law, not tax law. If that is not the case, wouldn't Bush's retroactive tax cuts have been technically illegal then as well? Also, since these changes apply to the current tax year, could either of those even be considered a retroactive tax increase?

whats the likely hood of it making past the senate?

PuroFreak

dutyje:

I believe that only applies in the case of criminal law, not tax law. If that is not the case, wouldn't Bush's retroactive tax cuts have been technically illegal then as well? Also, since these changes apply to the current tax year, could either of those even be considered a retroactive tax increase?

No that wouldn't apply because it only applies when you are "depriving" someone of their property. A retroactive tax cut doesn't deprive citizens of their money, it gives it back.

dutyje

But then you're depriving the welfare bums, sooo.....

PuroFreak

Haha, not exactly the same... But I'm for depriving them so sounds good to me! That shouldn't be illegal, it should be mandatory!!! ~

zoom6zoom

Look, the .gov pukes knew about the upcoming bonuses BEFORE any bailout money was awarded. Now everyone is making a big deal about it. Why? Because it's getting peoples attention, and distracting them from other stuff that's going on - just like Clinton bombing an aspirin factory. Keep your eyes open!

laker1963

zoom6zoom:

Look, the .gov pukes knew about the upcoming bonuses BEFORE any bailout money was awarded. Now everyone is making a big deal about it. Why? Because it's getting peoples attention, and distracting them from other stuff that's going on - just like Clinton bombing an aspirin factory. Keep your eyes open!

That may be zoom. I think that perhaps at least some of these guys were actually caught off gaurd that companies like AIG would take taxpayer money and turn around and give some of it away as bonus money.
I mean you would think they would not be so Fu-kin', totally stupid and greedy that they would think the people who were paying those bills would not get pissed at a move like that.
This is corporate welfare. Makes you wonder why these believers in the Free Market Capital system just can't wait to pony up to the trough. Unless of course their beliefs are based on greed, not actual confidence in their preferred system of money management. This is the best example of why you need regulations. Company's can't handle the responsibility of HONESTLY regulating themselves for their long term success. They make decisions based on what looks best "right now", with no thought for tomorrow. Like politicians that just can't seem to look past the next election, companies are doomed to repeat these mistakes over and over again. Without some regulations for them to follow, eventually they will end up exactly where they are now, as it is practically built into the money / management system in use today by these HUGE multi-national companies. So US tax payers are expected to provide money to a company so that company can take that money right out of the country and pay a BANK in a different country. We (not just US citizens) are providing these multi national corporations with money so that they can continue to shut down plants and move production to other countries where the employees can be treated like *** because they don't have the education, or workers rights legislation that we enjoy over here. Some will argue that this is the way the system works. the prize goes to the most competetitive, be that a company or a group of people in another country who are willing to work for less.
Thing is when the *** hits the fan who is asked to pay for it? The corporations who "have the right" to conduct business as they see fit?
Nope that would be you and I, the under worked over payed, lazy work force which made these corporations as successful as they are today.
Unions and over regulation are to blame for this mess? HARDLY !
It is GREED and no firm regulations to prevent the types of decisions which ultimately lead to this whole financial crisis, which are to blame. IMO

laker1963

Here is a link to a story that is out this morning. I think it speaks well to the point I made about the inability of these corporate types to be able to be honest and regulate themselves. They just are NOT capable of it.
http://www.cbc.ca/world/story/2009/03/21/aig-bonuses.html

urbino

dutyje:

I believe that only applies in the case of criminal law, not tax law. If that is not the case, wouldn't Bush's retroactive tax cuts have been technically illegal then as well? Also, since these changes apply to the current tax year, could either of those even be considered a retroactive tax change?

Yeah, like I said, it doesn't make any sense to me, but I don't know anything about the case law on the subject, so I'm not in a position to intelligently critique the argument.

urbino

Now there's an LATimes story quoting several legal experts saying this law almost certainly is constitutional.