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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no subject
Date: 2009-03-27 08:02 pm (UTC)I understand, but...
I'm hearing excuses. "We can't do this because it was contracted", "We can't do this because it conflicts with a prior tax law", "We only did what everyone else was doing."
Among one of the many interesting things I got at the ITG training was an explanation of creativity and problem-solving, and that they largely break down into two types: Iterative, and Intuitive.
Iterative changes are small tweaks, additions, adjustments. Altering parameters just enough to make a new item different from the previous ones. Iterative changes work really well in producing a bunch of different designs.
Intuitive changes are throwing out the baby, the bathwater, and nuking the house afterwards just to be sure, creating something radically different.
Governments pretty much universally make iterative changes. An intuitive social change is a revolution, as Jordan has described. While he's seeing similar attitudes in the mob as existed during the French revolution, I'm seeing similar attitudes in the establishment as existed during the Roman Empire, the Byzantine empire, and so on. Namely, our laws and our government are absolute, and if we're going to trip over our own laws solving a problem, we can't use that solution.
Which is fine, except, in a sufficiently broken system, the method of iterative change doesn't work. Insisting it will, making excuses, invites the mob outrage to sweep right through. The outrage is a response to the subtle message that if you're above a certain income, certain class, in certain professions and surround yourself with enough weasel-laws you can get away with anything.
Yeah, it's always been that way, I know you don't like cynicism, but that's where it comes from, when you hear excuse after excuse about why something can't be done because that's just the way it is. I feel this attitude has never been quite so naked. This is why the President of Sudan feels he can act the way he did, this is why there's a drug war in the Mexican towns, and were two shooting rampages two weeks ago. People are picking up that message, and either deciding they're unaccountable or justice will never be done.
That's why. More arguments, more tension, more stress, it directly relates. Some people are jumping out of windows, taking it out on their friends and co-workers. It's not bread-lines yet, but I don't see the reform, I don't see the solution that's going to save us all. This whole AIG thing is a big huge distraction, from that, the revelation there is no plan, no idea, and the experts solving it (Gov, AIG, etc) are the idiots that got us into this in the first place.
It's exactly what I told CDM when I left, that I appreciate they're trying to address the problem, but they can't see it and the things they measure only hint at it.