Retroactive Tax Penalties

[Misty_Morning]

Yes....I am pissed at AIG giving bonuses to the folks that drove that company into the ground.

Very pissed.

BUT.....if the congress and senate hadn't rushed the bill through...it might not have happened.

BUT....retroactive tax penalties could affect us all.

IF it's OK this time...it will be OK well when it hits the little man next time.

As much as I hate to say it....the government allowed this to happen. And now they want to change their minds.


Whats to stop them from saying that in two years time...we need pay rertroactive taxes from three years ago?


They fucked up.

And we are gonna have to pay....maybe retroactively.

 

[Dragonlipz]

The bikini barista at the expresso stand

says that she's ready to provide an exceptional cuppa expresso for a fair price without a bonus, unless, of course, you'd like to give her one.....

 

[Stella_Omega]

As much as I hate to say it....the government allowed this to happen. And now they want to change their minds.

Bush's government allowed it to happen.

That's one of the reasons why we elected Obama.

 

[voluptuary_manque]

My feeling is that no one should receive a bonus for failing.

 

[sr71plt]

BUT.....if the congress and senate hadn't rushed the bill through...it might not have happened.

How do you figure this? The corporate bonus system has existed for some time and was established without any government involvement at all.

Do you mean that Congress might have specified that the money couldn't be used for bonuses? If so, I can see that they might have done that--if the administration that brought the bill and got it passed wasn't in bed with the people traditionally getting such bonuses.

 

[DeeZire]

I read, or heard somewhere, that congress didn't restrict the bonuses because if they had, the US government would have been liable for lawsuits on the grounds that they were breaking a pre-existing contract, and that the damages they would have been liable for would have been three times the amount of the bonuses. So it sounds like it was a pragmatic decision that ended up making congress look bad.

I don't envy them. They can't win no matter what they do - thanks to the ignorance of the American public, which is nurtured by the Fox News pundits who's job it is to manufacture shit that will stick to the shoes of anyone close to the Obama administration.

 

[JAMESBJOHNSON]

Lincoln addressed the politics of this situation back during the Civil War. He said that if you do everything wrong and the end comes out right, it doesnt matter what you do; if you do everything right and the end comes out wrong, God and all his angels cant save you.

Obama should thank his lucky stars that Americans are pissed at AIG, in a year they'll come for him with their rope.

Right now Americans are pissed at Wall Street and Bush, but this will change quickly.

 

[DesertPirate]

As much as I hate to say it....the government allowed this to happen. And now they want to change their minds.

Bush's government allowed it to happen.

That's one of the reasons why we elected Obama.

Pelosi's Congress passed all the bills, fire her incompetant ass too!

By the way, a retroactive tax on such a small number of people is childish vindictivness at it's worst, and is Unconstitutional, it will be struck down in a month.

This is the kind of crap we can expect for another 1.75 years from this Thundering Herd of Dumbass formerly known as Congress. It's time to fire every one of the morons!

 

[DeeZire]

Pelosi's Congress passed all the bills, fire her incompetant ass too!

By the way, a retroactive tax on such a small number of people is childish vindictivness at it's worst, and is Unconstitutional, it will be struck down in a month.

This is the kind of crap we can expect for another 1.75 years from this Thundering Herd of Dumbass formerly known as Congress. It's time to fire every one of the morons!

Apparently you didn't read my post? The contracts were written in the private sector last year. Congress had nothing to do with that. If you're going to bring up the unconstitutional issue, what about the issue of voiding a contract? Would you support congress if they rewrote existing contracts from the private sector? That's the reason congress was stuck with leaving the bonuses alone. I realize Rush Limbaugh doesn't see it this way, but that doesn't make it any less true.

On the "thundering heard of dumbass" front, how are you doing with your constitutional amendment to make all members of congress purchase their own health insurance? Are you making any headway on that, or do you do nothing but complain and disseminate right wing talking points?

 

[cantdog]

Apparently you didn't read my post? The contracts were written in the private sector last year. Congress had nothing to do with that. If you're going to bring up the unconstitutional issue, what about the issue of voiding a contract? Would you support congress if they rewrote existing contracts from the private sector? That's the reason congress was stuck with leaving the bonuses alone. I realize Rush Limbaugh doesn't see it this way, but that doesn't make it any less true.

On the "thundering heard of dumbass" front, how are you doing with your constitutional amendment to make all members of congress purchase their own health insurance? Are you making any headway on that, or do you do nothing but complain and disseminate right wing talking points?

The retroactive tax, written to single out specific people, is not only unjust, but tyrannical. It may make Congress look good to the unreflective, but it is ferociously wrong-headed.

Congress failed in their oversight role for decades, under both parties' aegis. The executive, who has the legal mandate for oversight via SEC and other agencies, wilfully refused their oversight role on ideological grounds. The banks and other lawless predators were thus able to act with utter impunity, an impunity which the massive no-strings bailouts only underscore.

None of this begins to be put right by this stupid and tyrannical act of Congress.

First, it is not in evidence that the blame for the mess we're in rests with these jibroneys. All we know is, the mess AIG is in is theirs. Secondly, these bonuses, in toto, do not make a tithe of a tithe of the problem, and the furor over them is false populism, and functions as a distraction from the real difficulties. Those would be banks, corporations, and the last two administrations, who worked hand-in-glove with the rapacious bastards, enabling them to swill up many many times more money than these bonuses amount to.

Quit derailing the discussion into this bonus crap. That isn't the problem.

 

[cantdog]

This laissez-faire malarkey was altogether too much admixed with laissez-passer. Since we now are the controlling interest in AIG, we can fire these twads, can we not? We can negotiate with the next set of employees a new package without guaranteed bonuses, can we not?

Meanwhile, we can investigate the fraudulent and unethical actions of all who have caused the system to crumble, and prosecute. Who knows? Some of the bonuses may be taken back in fines.

 

[sr71plt]

The retroactive tax, written to single out specific people, is not only unjust, but tyrannical. It may make Congress look good to the unreflective, but it is ferociously wrong-headed.

What retroactive tax law? Congress hasn't passed such a law, has it? And, in any event, Obama has already said he'd veto any such law. Little reason to go ballistic over something not done. We have quite enough actualized screwups to get angry over.

And DeeZire has laid this one out quite well. The government had nothing to do with the bonus contracts and they were legal contracts before Congress found out about them.

At this point, the best that can be done is to shine a spotlight on the ones taking the bonuses and shaming them into coughing them back up (which is starting to happen).

 

[Misty_Morning]

This laissez-faire malarkey was altogether too much admixed with laissez-passer. Since we now are the controlling interest in AIG, we can fire these twads, can we not? We can negotiate with the next set of employees a new package without guaranteed bonuses, can we not?

Meanwhile, we can investigate the fraudulent and unethical actions of all who have caused the system to crumble, and prosecute. Who knows? Some of the bonuses may be taken back in fines.

I agree.

Plus, even though a contract exsisted for the bonus'...wouldn't it have been feasible to renegotiate those contracts before a bailout was approved?

From what I have heard, the fed knew about the contracts last fall.

I'm thinking that if AIG had the choice to recieve bailout money or face bankruptcy, they would have readily renegotiated.

It's like....forgo the bonus and keep a paycheck...or go bankrupt and end up in the unemployment line.

The more I hear Bernake and Geitner talk...the more I think they are a couple of dickheads. But thats just my frustration showing.

 

[sr71plt]

I agree.

Plus, even though a contract exsisted for the bonus'...wouldn't it have been feasible to renegotiate those contracts before a bailout was approved?

From what I have heard, the fed knew about the contracts last fall.

I'm thinking that if AIG had the choice to recieve bailout money or face bankruptcy, they would have readily renegotiated.

It's like....forgo the bonus and keep a paycheck...or go bankrupt and end up in the unemployment line.

The more I hear Bernake and Geitner talk...the more I think they are a couple of dickheads. But thats just my frustration showing.

I agree with cantdog on this too. I'd find every way I could think of to punish these people and hold them up to ridicule. (And never let any of them near a government contract ever again.)

However, Misty, how did Bernake and Geitner get into this? And what makes you think they won't do everything they can to get these people. A. This wasn't their doing, and B. There's so much going on at the beginning of the administration, that it's a little unfair to have expected Geitner, at least, to be on top of it. God, Congress hasn't even confirmed his assistants yet.

 

[Misty_Morning]

I agree with cantdog on this too. I'd find every way I could think of to punish these people and hold them up to ridicule. (And never let any of them near a government contract ever again.)

However, Misty, how did Bernake and Geitner get into this? And what makes you think they won't do everything they can to get these people. A. This wasn't their doing, and B. There's so much going on at the beginning of the administration, that it's a little unfair to have expected Geitner, at least, to be on top of it. God, Congress hasn't even confirmed his assistants yet.

Totally.

And my opinion of them is based purely on my frustration and emotions.

Then I stop and think....ya know...these dudes didn't get to where they are by total fuck ups.

And Geitneir does NEED to get his team in place and the Congress needs to stop pulling this patisan BS and help get that team in place...or we will keep getting fucked.

Yeah, there are folks that want Geitner out and are calling for his ouster...but what's it been...2 months?

But he hasn't come into this job totally blinfolded.

But, yes....I would like to see him roll a few heads at AIG.

 

[trysail]

( Posted elsewhere but germane to this thread )


Michael Lewis is usually readable and is knowledgeable. Like myself, once upon a time, he worked in the investment field ( he on the "dark side" [ i.e., Salomon Bros and Wall Street ], myself for a fiduciary [ a/k/a the "buy side" ] ). Both of us eventually departed, unable to suppress our respective nauseated consciences and sense of ethics. Unlike Michael Lewis, I haven't authored a best-selling exposé. Unlike Lewis, I had the benefit of experienced and informed elders who, when I was still an impressionable youth, succeeded in instilling the idea that "Wall Street ethics" is an oxymoron. Lewis had to figure that out for himself. *Sigh*

His sojourn as a bond salesman for Solly was demonstrably effective at establishing that truth to his satisfaction; witness Liar's Poker.

A new career and writer was launched.
________________________


( Fair Use Excerpt )
http://www.bloomberg.com/apps/news?pid=20601039&sid=atlHxXH7FweQ&refer=home

Mass Hysteria Over AIG Obscures Simple Truths
Commentary by Michael Lewis
March 20 (Bloomberg)

"Last September, the U.S. government began to dole out the first of $173 billion to American International Group. A big chunk of it passed right through to banks that had bought insurance from AIG against mortgage and corporate defaults -- foreign banks such as Deutsche Bank and Societe Generale but also some domestic ones, such as Goldman Sachs and Bank of America.

U.S. government officials then went to great lengths to disguise from the public exactly what they had done, and why, going so far as to declare the ultimate list of recipients of taxpayer funds off limits to the taxpayer. To its immense credit, the media -- or, rather, a handful of diligent reporters, the New York Times’ Gretchen Morgenson chief among them -- prevented the public officials from getting their way.

This incredible act triggered hardly any political backlash. In effect, the U.S. taxpayer had paid off AIG’s gambling debts. The end recipient of the money was not AIG, but Goldman Sachs, Deutsche Bank and the others..."

*********​

"... But when AIG itself pays out $165 million in bonuses -- money it is contractually obliged to pay -- the entire political system goes insane. President Barack Obama says he’s going to find a way to abrogate the contracts and take the money back. A U.S. senator says that AIG employees should kill themselves.

Every recriminatory bone in the political body is aroused; the one thing you can do right now in Washington without getting an argument is to rail against the ethics of AIG’s bonus payment.

Apart from Andrew Ross Sorkin at the New York Times, it occurs to no one to say that a) the vast majority of the employees at AIG had as little as you or I to do with its quasi- criminal risk taking and catastrophic losses; b) that the most- valuable of those employees can easily find work at AIG’s competitors; and c) that if the government insists on punishing those valuable employees they will understandably leave, and leave behind a company even less viable than it is, and less likely to give the taxpayer back his money.

And also -- oh, yes -- that if the government can arbitrarily break contracts made by firms in which it has taken a stake no one in his right mind will ever again make a contract with one of those firms. And so all of the banks in which the government has investment will be damaged... "

********​

"...we can observe several general truths about the financial crisis, and the attempt to end it:

1) To the political process all big numbers look alike; above a certain number the money becomes purely symbolic. The general public has no ability to feel the relative weight of 173 billion and 165 million. You can generate as much political action and public anger over millions as you can over billions. Maybe more: the larger the number the more abstract it becomes and, therefore, the easier to ignore. (The trillions we owe foreigners, for example.)

2) As the financial crisis has evolved its moral has been simplified, grotesquely. In the beginning this crisis was messy. Wall Street financiers behaved horribly but so did ordinary Americans. Millions of people borrowed money they shouldn’t have borrowed and, not, typically, because they were duped or defrauded but because they were covetous and greedy: they wanted to own stuff they hadn’t earned the right to buy..."

 

[DesertPirate]

Apparently you didn't read my post? The contracts were written in the private sector last year. Congress had nothing to do with that. If you're going to bring up the unconstitutional issue, what about the issue of voiding a contract? Would you support congress if they rewrote existing contracts from the private sector? That's the reason congress was stuck with leaving the bonuses alone. I realize Rush Limbaugh doesn't see it this way, but that doesn't make it any less true.

On the "thundering heard of dumbass" front, how are you doing with your constitutional amendment to make all members of congress purchase their own health insurance? Are you making any headway on that, or do you do nothing but complain and disseminate right wing talking points?

I actually have 8 people working with me on a draft to be introduced to state legislatures next year.

I do not support voiding contracts, it's wrong and against the law. Just like trying to create a retro active tax that does the same thing.

 

[Misty_Morning]

I actually have 8 people working with me on a draft to be introduced to state legislatures next year.

I do not support voiding contracts, it's wrong and against the law. Just like trying to create a retro active tax that does the same thing.

But DP, there's BIG difference between voiding contracts and renegotating.

 

[sr71plt]

But DP, there's BIG difference between voiding contracts and renegotating.

I don't think either party would consider renegotiating. Those keeping the bonuses have no incentive to renegotiate if they are hanging tight on receiving anything in bonuses, and the position of the government should be that bonuses to those responsible for the screwup should be zero or less.

 

[DesertPirate]

But DP, there's BIG difference between voiding contracts and renegotating.

If they had let AIG go into bankruptcy there wouldn't be an issue. The judge would have ruled one way or the other. Letting Congress get involved is idiotic since most of them have never actually done any "real" work.

What about the moronic SecTreas wanting power to sieze failing companies? He can't do his own taxes! I have not seen any proof he can find his ass with both hands.

And most folks here try to claim that the Obama/Pelosi/Reid coalition are not pushing for socialism

 

[sr71plt]

And most folks here try to claim that the Obama/Pelosi/Reid coalition are not pushing for socialism

Excuse me? The first push for socialism (the bank bailout) came from your idol, George Bush the Lesser.

 

[Misty_Morning]

If they had let AIG go into bankruptcy there wouldn't be an issue. The judge would have ruled one way or the other. Letting Congress get involved is idiotic since most of them have never actually done any "real" work.

What about the moronic SecTreas wanting power to sieze failing companies? He can't do his own taxes! I have not seen any proof he can find his ass with both hands.

And most folks here try to claim that the Obama/Pelosi/Reid coalition are not pushing for socialism

As much as I am disgusted with both houses of congress, I think your statement that most of them have never done any real work is reactionary.

Most of these folks have lead very successful careers prior to being elected to office.

If they were previously in State (not state) government, their salaries were very low comparativley speaking. In most cases their had two jobs...being in State legislature and holding a real job to pay the bills.


Do I think they ride the gravy train once they are in national office. Yes for the most part.

I am a strong believer in term limits. And I think that we need to inact legislation accordingly.

 

[jomar]

I agree with cantdog on this too. I'd find every way I could think of to punish these people and hold them up to ridicule. (And never let any of them near a government contract ever again.)

However, Misty, how did Bernake and Geitner get into this? And what makes you think they won't do everything they can to get these people. A. This wasn't their doing, and B. There's so much going on at the beginning of the administration, that it's a little unfair to have expected Geitner, at least, to be on top of it. God, Congress hasn't even confirmed his assistants yet.

Deezire noted it. But specifically, Geitner mentioned to Dodd that preventing the bonuses, which was really deferred salary as I understand it, would lead to the lawsuits. So Dodd changed the language in the bill. So I'd say they knew.

I suspect that they thought it to be a 'miniscule' amount comparitively, but didn't anticipate the public outrage right - not sure how they could miss it though. I think had they had explained that the bonuses were not really 'bonuses' it would have assuaged people some...but hey, maybe the bonuses really were bonuses.

 

[sr71plt]

As much as I am disgusted with both houses of congress, I think your statement that most of them have never done any real work is reactionary.

Most of these folks have lead very successful careers prior to being elected to office.

And even that is knee-jerk reactionary. Believe me, if Congress really didn't do any work, your life would go into the dumpster within about two weeks.

It's a national game to scapegoat politicians (we do need to find someone other than ourselves to blame for everything), of course, but it's a lame game. The needs government is faced with are highly complex and our various levels of government keep churning along keeping your lights on and services going and food within your reach and, on the whole, terrorists and muggers out of your kitchen. The craziness we bring up in these forums is a very thin layer on the outer margin of what is happening in public services.

 

[sr71plt]

Deezire noted it. But specifically, Geitner mentioned to Dodd that preventing the bonuses, which was really deferred salary as I understand it, would lead to the lawsuits. So Dodd changed the language in the bill. So I'd say they knew.

I suspect that they thought it to be a 'miniscule' amount comparitively, but didn't anticipate the public outrage right - not sure how they could miss it though. I think had they had explained that the bonuses were not really 'bonuses' it would have assuaged people some...but hey, maybe the bonuses really were bonuses.

Not that I agree with it, but the Obama folks were saying yesterday that the bonuses are a mere pimple on the bum and have derailed the goverment's recovery campaign by a full week already, far out of proportion to their effect.

I think, though, that this outrage is just what we need to crack some heads and jerk some corporate attitudes up (and galvanize the public in doing so), so I don't see why the Obama administration isn't riding the wave more.

On what did the government know when, though, I go back to what in the hell can we expect of people in their jobs for less than two months with all the shit they walked into--and in Geitner's case, without a full staff on duty because appointments haven't been confirmed. There's only so much of this stuff anyone can be expected to get their arms around in this time frame and atmosphere.