Punished Enough
Mar. 26th, 2009 02:43 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
rowynI wasn't going to say anything about the AIG bonuses. Really, I wasn't, because I think the whole furor is silly, making a huge issue over a tiny symptom.
Then I read this.
Short version:
It is not possible, under current US tax law, for an employee to return income to his employer and have that money not counted as part of the employee's income.
So, those who got bonuses have the following options:
(A) return the full bonus to AIG, in which case they will owe taxes on the full amount of the bonus anyway.
(B) donate the full bonus to charity, in which case the alternative minimum tax means they probably still have to pay taxes on all or most of it.
(C) keep the bonus and use it to pay state and federal taxes which -- if Congress passes the House's version of the punish-AIG-bill -- will probably exceed 100% of the bonus amount.
Y'know, I am not without sympathy for those who are angry that AIG's financial division employees still had a job and got fat "retention" bonuses (even if they'd quit) regardless of their performance at their job.
But the government response here leaves me truly infuriated. These employees didn't do anything but accept what they were offered for legal employment, and this after-the-fact "no, actually, give us back that $1,000,000 bonus or we'll throw you to the mob, plus you have to pay us an additional $280,000 or we'll jail you for tax evasion" is just nauseating. No one who hasn't been convicted of a crime should be subject to fines of 130% of income.
What a mess.
Then I read this.
Short version:
It is not possible, under current US tax law, for an employee to return income to his employer and have that money not counted as part of the employee's income.
So, those who got bonuses have the following options:
(A) return the full bonus to AIG, in which case they will owe taxes on the full amount of the bonus anyway.
(B) donate the full bonus to charity, in which case the alternative minimum tax means they probably still have to pay taxes on all or most of it.
(C) keep the bonus and use it to pay state and federal taxes which -- if Congress passes the House's version of the punish-AIG-bill -- will probably exceed 100% of the bonus amount.
Y'know, I am not without sympathy for those who are angry that AIG's financial division employees still had a job and got fat "retention" bonuses (even if they'd quit) regardless of their performance at their job.
But the government response here leaves me truly infuriated. These employees didn't do anything but accept what they were offered for legal employment, and this after-the-fact "no, actually, give us back that $1,000,000 bonus or we'll throw you to the mob, plus you have to pay us an additional $280,000 or we'll jail you for tax evasion" is just nauseating. No one who hasn't been convicted of a crime should be subject to fines of 130% of income.
What a mess.
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(shakes her head in disbelief)
Date: 2009-03-27 01:51 am (UTC)Except for one thing.
In this case, we have no hope of seeing justice done. Look at what Obama's doing. Do you get a strong sense that he's a hard hitting reformer? I don't. He hasn't made a SOUND about even going as far as Bush the Elder. You know, that amazingly progressive president who oversaw damage control on the S&L crisis. A crisis that looks a lot like a dress rehearsal for this one... "How much can we get away with ? that much. ok...."
At best, the US has descended into a soft fascism. Obama is no better than Bush. Why else would he insist on upholding the precedents regarding the invincible executive which Bush tried to ram through? The slate legal column said this was absolute nonsense. So Obama has no excuse as a so called populist and progressive but to state that this stuff is wrong and outside any pale of the law.
So I accept the AIG bonus flap is a diversion, like a matador's cape. I accept that it is bad governance to deal with it this way. But given that the US (and by proxy, Canada, since our economy is wedded to yours) has officially gone to Hell in A Handbasket...given I anticipate no basis for it recovering in my lifetime (given the systematic culture of delusion, corruption, and arrogance in common through the business and political elites)...I think I'll enjoy the cape flapping. Its enjoyable. Sure, I'm about to get run through by a sword, but I know nothing I can do is going to change this now. There's too much inertia.
Besides, if my life has to be destroyed, I want to at see at LEAST a year or two's wealth stripped from the triggermen. Sure, it won't fix anything nor is it fair. But at least someone aside from me is going to get hurt. In a better world I would be hoping for more. But it is clearly futile to hope for that. I cannot believe that things actually have slid this far. Welcome to the Revolution of neo-oligarchy.