Fifteen Of Top Twenty AIG Bonus Recipients Returned The Money

N.Y. Attorney General: 15 AIG Execs Agree to Return Bonuses (Fox News)

SHAMED: 15 Of Top 20 AIG Bonus Recipients Returned The Money, Says NY Attorney General Cuomo... Some Have Refused... Holdouts May End Up Being Publicly Named... Less Than Half The Bonuses Went To Americans (Huff Post)

Cuomo strong-armed AIG for details on the millions paid to dozens of executives. (Politico)

New York Attorney General Andrew Cuomo says that more than $30 million in bonus cash has been returned so far.  (CNN)

Cuomo Says Most Huge A.I.G. Bonuses Were Returned. (New York Times)

Tax Me Like You Really Mean It!

From the Washington Times:

As he empathized with recession-weary Americans, President Obama arranged in the days just before he took office to secure a $500,000 advance for a children's book project, a disclosure report shows.

One blogger suggests we do unto our politicians as they have done unto Wall Street:

Since threats of confiscatory government taxes on "unmerited" or "windfall" income seem to be all the rage these days, I am simply proposing that all elected government officials who write books should be taxed at 100% on any royalty advances that they receive while in office — while they are employed by us as our public servants. That's only "fair" ... isn't it?

Obamaphiles don't like the idea:

• The limit on banker's bonuses is because the gov't gave BILLIONS OF DOLLARS to the banks. The gov't dollars should NOT be used to pad the already wealthy banking executives pay when their companies have performed so poorly.  I don't see Obama getting BILLIONS in gov't money for screwing up the financial system, like the bankers did.

• The growing discrepancy between extreme wealthy [sic] and the average American is what leads to political instability. And that only adds to market turbulence. It seems obvious what needs to be done, and yet boneheads are out there rambling in complete ignorance of the situation.
  

But Bush foes are interested in applying the AIG precedent to George Bush:

See, Dubya just signed a big ol' book deal. Crown publishers is paying him a $7 million advance to writing a book called Decision Points, all about what a decider he was. Now the general wisdom is that Bush screwed things up. Seriously, ask Pelosi, Rangel, Reed or Obama and they'll give you a whole litany of things he did wrong to get us in this mess.

If you can tax AIG bonuses at a punitive rate, is there any reason not to tax Bush? Is there some special exemption for ex-Presidents that protect them against vindictive tax policy from current politicians? Not as far as we know.

I can't take it anymore! Democrats whine about the "excessive" earnings of the high achievers in this country, but when the very same Democrats are elected to high office, they use the office as a stepping stone on their quest to take home seven figure mountains of cash.

Liberals say the key to a more just society is to get more money into the U.S. Treasury.  I say "put your money where your mouth is." There's hardly a liberal in this country who couldn't afford to send a FEW extra dollars to the U.S. Treasury on a voluntary basis.   Go ahead Mr. Liberal, give until it hurts.   Or try a more cautious approach.  Are you supposed to be getting a tax refund? Let Uncle Sam keep it.  The Federal Government doesn't owe you any money, you say?  Just send ten extra dollars to Uncle Sam. Then you'd actually have a little credibility. But you won't do that will you? 

You won't admit it, but your actions speak louder than words — you know that an extra dollar in the hands of Government, even with your democrat buddies in charge, is a bad investment!

And don't give me the this faux outrage about Bush's $7 million figure deal. Republicans aren't the ones preaching against productivity and wealth.

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Bonfire of the Trivialities

Now, in the scheme of things, $165 million is a rounding error. It amounts to less than 1/18,500 of the $3.1 trillion federal budget. It's less than one-tenth of 1 percent of the bailout money given to AIG alone. If Bill Gates were to pay these AIG bonuses every year for the next 100 years, he'd still be left with more than half his personal fortune.  

Grandstanding, parochialism...and a rush to mindless populism. Over what?  ...Bonus money that comes to what the Yankees are paying for CC Sabathia's left arm.

Is that AIG tax constitutional?

Concluding his written statement, Gregg said that the Senate bill would undermine the credibility of the U.S. tax system and "create an atmosphere where any group that offends the sensibilities of the majority may be at risk for punitive tax treatment."

100% Tax

On the AIG kerfuffle:

This whole AIG fiasco...is 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. So...you'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."

More

AIG uproar rattles private investors

In the process of "doing justice," the government is undermining respect for contracts and ultimately respect for law.

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