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House Passes Bonus Tax Bill

Posted on Mar 19, 2009
AP photo / Evan Vucci

House Minority Leader John Boehner said the bonus tax bill was a “political circus” to keep the focus off the Obama administration’s mishandling of the AIG bonus boondoggle. That’s Rep. Mike Pence, an Indiana Republican, behind him.

After the top brass at AIG couldn’t be stopped from dishing out $165 million in bonuses to executives who didn’t exactly deserve gold-star treatment, Congress is attempting to recoup most of the money by slapping a 90 percent tax on such executive windfalls.

Meanwhile, Sen. Chris Dodd is disclaiming responsibility for enabling the AIG bonus debacle by changing the wording of a key section in the stimulus bill passed last month; Dodd says the Obama administration made him do it.

USA Today:

The U.S. House approved a bill Thursday that would impose a new tax on the $165 million paid to bailed-out insurance giant AIG as Senate Republicans stepped up criticism of the Obama administration’s handling of bonuses.

The House measure would apply a 90% tax on bonuses given to employees who earn more than $250,000 at any firm that received more than $5 billion in bailout money.

The vote was 328-93.

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By felicity, March 20, 2009 at 7:26 am Link to this comment

Well, we all know that Congress passes tax measures to reward its financial benefactors so it makes sense that it would pass a tax measure meant to punish, especially since AIG’s behavior also exposed Congress’s intrinsic ineptness, laziness and just plain self-benefitting skulduggery. 

AIG afterall did nothing illegal in giving out the bonuses.  Immoral, without question, but the feigned outrage of Congress at AIG’s immoral behavior is peculiar to say the least as Congress engages in immoral behavior on a daily basis.

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By Rajan, March 20, 2009 at 6:48 am Link to this comment

In the midst of the AIG bonus mess, poor Tim Geithner has been caught squarely in the crosswires.  My heart really bleeds for him.

His predicament is rather akin to the case of the hunter being hunted.

In fact, he committed a grave error of judgment in exchanging his cushy job at the New York Federal Reserve Bank where he could hobnob and chum with the denizens in the den of thieves, aka the Wall Street for the dubious distinction of a cabinet post in another similar den , aka Washington, D.C.  A bright and intelligent man that he appears to be (he would not have reached the pinnacle at the NY Federal Reserve otherwise, would he?), he ought to have anticipated that he would be getting himself into a no-win situation and would be damned if he did, damned if he didn’t, as the Treasury Secretary under the present precarious circumstances.  Any success he manages to score, if at all,  will automatically go to the score card of his boss, the Prez and, for any failure (a scenario much more likely), he will be pilloried and hauled over coals by every passer-by in the street.  Of course,  there will be the customary “vote of complete confidence” from the Prez every now and then relayed through the White House press secretary until the moment of reckoning arrives and he is shown the door eventually in the wake of the gathering clamor demanding his resignation.

I am sure that Geithner is regretting now,  every minute of his waking hours, his fateful mistake in taking that call from Obama on that wintry night asking whether he would be keen on joining his team and saying, in an impulse, “yes”!

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By M. Currey, March 20, 2009 at 3:52 am Link to this comment
(Unregistered commenter)

Does congress really think that that the latest show of anger is really believed by the American public.

It is the shower before work crowd that is more important than the shower after work crowd.

If you take down the workers benefits before helping out the auto company than the same should apply to Wall Street.

People are talking about contracts and obligations while the country is in serious meltdown. 

Congress should know what ordinary people (those who do not steal) are going through.

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By Inherit The Wind, March 19, 2009 at 9:09 pm Link to this comment

Let the GOPers in the Senate filibuster and kill this bill…isn’t that just precious?

The Republicans then filibuster to protect $150 million in bonuses ripped off from you and me….Isn’t that great?

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By mill, March 19, 2009 at 7:24 pm Link to this comment

What the House did is among the worst ways to handle the problem.  It makes the law a political weapon rather than an agreement among us how to live and get along.

How about instead starting the criminal investigation Mr. Scheer suggests,  and then freeze assets of everybody important in AIG?  See if they’d flex a bit on renegotiating the terms of their retention payments.

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By CJ, March 19, 2009 at 7:20 pm Link to this comment

Congress at its grandstanding—photo-op/pr—best. Again with spectacle/charade. Brought to us, incidentally, by individuals no less culpable than corporate receivers, who’ve been receiving more than any persons ever needed, much less “deserved,” for some number of centuries.

But members of Congress live by oath taken to hypocrisy upon being elected. Actually, taken before being elected while still campaigning. Excuses are offered up later, if ever. Usually never.

Were nominees forced to read what Hedges wrote this week, that would do no good. Heads would nod in agreement with Hedge’s points just before readers claimed that while Hedges speaks truth and seems a decent-enough fella, he along with his thoughts are hopelessly, romantically naïve. There’d be talk of how observing sausage being made is not pretty. As though Congress ever made—prettily or not—anything so tasty as sausage.

I can hardly speak for Hedges, but today’s bit of grandiosity in the House serves as actually spectacular example of how “values” are reduced in practice to blah, blah, blah.

Just about by now (PST) each member of the House who voted, “yeah,” is snug as bedbug dreaming of how he/she showed those bonus-sucking b-words. So there!

Amorality was long ago institutionalized in the form of capitalist economy. Under “philosophical” cover in the form of moralizing ideology that attends and pretends, or, more accurately, promotes capitalism as right just. (Old, but still current, bourgeois dream.) Dog-eat-dog, earthly reality was alchemized—by Word, of course—into moral code that still claims that pursuit of self-interest is in the interest of each and every. Most all (particular in proclaimed: “progressive, new world”) came to believe in Word. ‘Cept for a few white guys who reportedly thought in terms of democratic ideals. Nowhere in original, revered document is there mention of economics. Only declaration of politics. That is, nowhere mention of economic reality for vast majority. Wordy proclamation that nonetheless encoded in law a specific arrangement whereby certain wealthy, thus already powerful, persons would forever and a day be in charge of unruly types. By military force, if necessary. Written proclamations remain expression of beautiful ideals, still not yet practiced.

Ah, because, capitalism is by its very nature, at its very core, exploitative—by each of every Other. By now, contradiction that remains between capitalist reality and ideological cover consisting of high-mined ideals (indeed incorporating Golden Rule to some degree) has risen almost to consciousness among a far larger group of individuals than since…circa 1930?

Not including consciousnesses of any in currently in power. Certainly not in consciousnesses of members of Congress, where name of game is living one thing while preaching a whole other thing. But now and again—for the sake of maintaining power relations—it does become necessary for those constituting government to punish (or appear to punish) a few of those who sponsor government. And so today, in show (spectacle) of “sympathetic solidarity” (downness with you and me), Pelosi & Co. levied a tax on high rollers. Such that if bonus was but measly mil, any receiver of that will have to make do with far-more measly 100 large. Still good enough to buy a high-end car in which to reside.

(O’Donnell noted on Olbermann that Senate will not likely take up House action. Stupidly, one might add, if Reid & Co don’t.)

And so, along with unrestricted bailouts to ruling elite, Congress probably HAS salvaged capitalism. By hook and by crook, and by B.S. spectacle, all in place of taking responsibility, let alone out of interest in justice. Capitalism will continue for a time longer, if never again quite so exuberantly as over the past seven decades.

And fatheads still think (rather blindly faithfully pray) that there is no such really real thing as dialectic.

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By pw, March 19, 2009 at 4:21 pm Link to this comment
(Unregistered commenter)

Stop and think.  Why does Congress get the money from the AIG bonuses in the form of taxes?  Why not just pass it straight back to AIG?  That is who congress gave it to in the first place. 

Once again, Pelosi show their idiot-selves.

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By jr., March 19, 2009 at 4:05 pm Link to this comment

Taxation without representation, hmmmmm.

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By Mark G, March 19, 2009 at 3:49 pm Link to this comment
(Unregistered commenter)

OK, enough said, move on.  I’m pissed also but we have a multi-trillion dollar problem so enough time spent on $160M on bogus bonuses.

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