Thursday, March 19, 2009

100% Tax

This whole AIG just a complete farce. What it really shows is how the government has completely bungled the AIG takeover. Blame the Bush administration and the Obama administration. It also shows, once again, why the government shouldn’t run anything, because it cannot run anything.

AIG should have been placed in bankruptcy last fall under some sort of government sponsorship. While in bankruptcy, all the salary contracts (and every other AIG contract) would have been nullified and voided. At the same time, there would have been an orderly liquidation and sale of AIG’s assets and separate divisions.

Larry Kudlow 

I don't like the idea of tax money being used for multi-million dollar bonus checks, particularly when those millions are going to corporate executives who have driven their company into a ditch. This is why we shouldn't be handing out billions of taxpayer dollars to private corporations. Having said that, it's time to get some facts straight about the $165 million AIG mess.

1. The AIG employees recieved the payments in question persuant to contracts written last March (pre-TARP). The bonuses in these contracts were NOT based on performance.

2. AIG is headquartered in Wilton, Connecticut. In Connecticut they have a little gem called the "Wage Act." The state law allows employees to sue for twice the full amount of contractually owed wages plus attorney's fees, if an employer refuses to pay up.'re running AIG. What would YOU do?

3. The Democrat spendulus bill that was rammed down America's throat provided an extra layer of protection for these bonuses (thanks to AIG's bestest buddy, Democrat Chris Dodd). Oops! Our Democrat Congress and our Democrat POTUS have had considerable difficulty coming up with effective CYA maneuvers. In an act of despiration, Nancy Pelosi has proposed scandalously confiscatory legislation that would recover the bulk of these bonuses by taxing them at a rate of 90%. Ninety percent is barely enough as far as Chucky Schumer is concerned. "They should voluntarily return [the bonuses]. If they don't, we plan to tax virtually all of it," New York Sen. Schumer declared on the Senate floor.

4. Small problem with Madame Nancy's plan: it's unconstitutional. Article I, Section 9, clause 3 expressly forbids "bills of attainder." What's a bill of attainder? "It's a law that is written that is specifically aimed at an individual or small group of individuals, with the purpose of punishing or penalizing them in some fashion. It is also referred to as a 'private bill.' The British did this on a regular basis in the eighteenth century, which is one reason why the Constitution absolutely forbids it."

5. Not that congress actually cares about what the constitution says, but Article I, section 9 also prohibits the passage of ex post facto laws. "An ex post facto law is one that is passed after the event to which it relates has already occurred (another favorite strategy of the British). If Congress were to make the receipt of these bonuses taxable at a rate different than they are taxable now, and then enact a criminal penalty for the failure to pay, it would clearly be an ex post facto law and therefore would violate Article I."

The idea that Congress would even consider interfering with these contracts retroactively should be a grave concern for every one of us. And the idea that the government (with the support of a populist outrcry) would target a small group of individuals for a punitive 90% tax is extremely frightening to me. Who's next?!

AIG should honor its contractual obligations to its employees. Congress should stay out of it. Yes, it's depressing to witness this scandal, but let's not allow it to become a distraction. We should be much more concerned about Congress's insatiable, multi-billion dollar pork addiction. Let's get serious about saving taxpayer dollars: how about a 90% tax on porky earmark payouts?

Come on Nancy, make it happen! I'll make it easy for you. I've taken the liberty of borrowing your words; here's your press release:

"We must protect the American taxpayer from politicians who would use their constituents' crises as opportunities for private gain. Because Congress does not use sound judgment in the use of taxpayer funds, taxpayers will recover the bulk porky congressional indiscretions with a 90 percent rate of taxation on earmark payouts. I urge all my colleagues to vote in favor of this legislation and in favor of recovering taxpayer dollars and protecting Americans from the continued poor judgment of America's biggest spenders."


AIG uproar rattles private investors
In the process of "doing justice," the government is undermining respect for contracts and ultimately respect for law.

Must read!
Why the Recipients of the AIG Bonuses Will Almost Certainly Not Have to Give Them Back

Geithner may not survive
To say Treasury Secretary Tim Geithner is on the hot seat would be an understatement. The chorus calling for him to lose his job is decidedly stronger...

Dodd facing fresh political firestorm
Dodd just admitted on CNN that he inserted a loophole in the stimulus legislation that allowed million-dollar bonuses to insurance giant AIG to go forward – after previously denying any involvement in writing the controversial provision. *All of the Democrats have to take responsibility for this, not just Chris Dodd. The Democrats and Mr. POTUS rammed this bill down America's throat. No time to read the bill, no time to debate the bill...just pass it! They promoted the bill, signed the bill, and to my knowledge, not one Democrat raised an eyebrow in reference to Dodd's "loophole."

Ten fascinating inventions: clever, brilliant or stupid? You be the judge.

Vets win: Idiot Obama forced to back down.

Jon Stewart slams Obama's stupid idea:


Clay Bowler said...

Good research, especially number 2. It's no wonder I no longer go to NBC for news. You aren't going to get that out of them.

Franklin's Locke said...

Great Post! A lot of great info here. AIG is a huge scandal and the MSM is trying to cover for Obama and the Dems, but it is not working. This is only the beginning. Freddie and Fannie are paying bonuses, Citi is building new offices for their exec’s, and more is coming.

This is why the government should have done not bailouts. It is just going to be wasted.

Humble wife said...

I wrote a post today that explains why I understand what is going on...

As to the inventions: really a battery powered battery charger-clever.

The inflatable dartboard- this makes it clear to me who the voters were in this election. It will be popped, but who cares we WANT a patent. STUPID IS AS STUPID DOES.

Thanks once again for compiling all this info!

Adrienne said...

RK - this is one the the best written summations of the whole affair I have read to date. I really like things laid out one by one in easy to read and understand language (which is waaaay harder to do than throwing around $10.00 words.)

And since it echoes everything I have said around the dinner table it must be right! ;-)


Jean said...

You are my hero! Very well written and explained.

I, too, agree with your previous blogger that Chris Dott is a fall guy - not that he doesn't deserve it. And, Treasury Secretary Timothy Geithner seems too bewildered to have concocted this whole mess - the main players, Obama, Reed, Pelosi, had to have known and probably wrote the text or had input on the bonuses, they just needed fall guys. Dodd is great at schmoozing, he believes we would fall for anything he says. The Connecticut papers have taken a smart pill and have brought all this sudden enlightment of Dodd's memory lapse. Can this be an early onset of dementia for the Fab Four - Dodd, Obama, Pelosi, and Reed?

suek said...

>>Citi is building new offices for their exec’s...>>

See??? the stimulus is working! More people are getting employed!

>>Can this be an early onset of dementia for the Fab Four - Dodd, Obama, Pelosi, and Reed?>>

Even if it did, could you be confident that it would mean the end of their careers???

I _wish_.

suek said...

Just heard on Fox that of the 16 firms that got bailouts, some of them owe fairly large amounts of taxes. Back taxes?? I'm not sure. Apparently, they also signed a statement prior to receiving bailout money that they had no tax liability.


Need more info. Employee withholding taxes and Federal unemployment taxes, plus SS and Medicaid are required to be paid on a regular basis, depending on how much your payroll is. Some are quarterly, some monthly, some weekly and some daily. We have a very small company - three employees, not paid anywheres near the level of some out there - and my 941 that I have to file each month totals more than the pay of any one of the employees. If those companies had big payrolls and were required to pay daily, and if they were in trouble (otherwise, why would they get bailouts) they could owe big bucks and not be very far in arrears.

So...I don't know. It could get interesting, though.

RightKlik said...

CB: Thanks. No the MSM aren't going to dig into the things that will embarrass their Democrat buddies.

FL: Thanks. I agree, let them go bankrupt.

HW: Thanks for reading all this info! If we can't stop Obama, at least we can tell everyone else "we told you so."

Adrienne: Thanks. Too bad we conservatives have to be our own news media and provide our own commentary.

Jean: Thanks. I absolutely agree that Dodd deserves every bit of the embarrassment he's experiencing and more. I just hate to see the other dems wiggle away from the blame they deserve.

Suek: the more of these stories I hear, the more I'm convinced we should let them all fail. But I'd love to see Congress get as much scrutiny as these corporations are getting.

Anonymous said...

Stop your Dancing With The Devil..
No man is perfect. Mr. Bush certainly showed us that.
Mr. Obama will right any wrong that he sees fit to .

My Daily Rant said...

fiasco is right, it keeps getting worse every day.

RightKlik said...

The GHB: "Mr. Obama will right any wrong that he sees fit to ."

If that's true, I would suggest that Mr. Obama needs to open his eyes, and get busy!

MDR: Frankly, I am quite that Obama has managed to fail so miserably in such a short period of time.