There is no one who feels more than I do that it is ridiculous that people at AIG are getting bonuses. Even if they are employees who have no, or only nominal, salaries and instead effectively get income from only performance-based bonus compensation, they should not receive payouts from AIG. No one forced any one of them to sign up for a job that compensates using bonuses rather than salary, and when times were good they enjoyed the benefits of that non-fixed compensation. Sometimes an employee of a company suffer because of his own individual decisions, and sometimes he suffers because of the company's fortunes. Unfortunately, even honorable, value-adding AIG employees, while getting sympathy from me, don't serve as sufficient rebuttal for why no one at the company (in operations that lost investors' money) should receive bonuses. Easy enough to understand, right?
Having said that and wishing that the money allocated by AIG to bonuses will be pulled back to the government or otherwise better used, I totally disagree with the legislation to change rules (into taxing at a rate of 90% any bonuses exceeding $250,000).
It sets the wrong tone. It is arbitrary. That money, in my eyes, does not rightfully belong to those AIGers, but it's aweful to realize that the U.S. government could in a few days time put a hook out to take money back out of the pockets of Americans who have not been convicted of any criminal offenses. 'Talk about Big Brother-ing. It can be insidiously discouraging to entrepreneurialism.
The legislation might not even be necessary. New AIG CEO Liddy, who treads a difficult position in the middle of things and is yet to be determined as a good guy or bad guy in my book, has instructed AIGers to return the bonuses. If they proceed to do that, maybe it's a better outcome for all parties and with less administrative expense to the government. It is ironic and disappointing that vote on this bill is breaking generally along partisan lines and that the Democrats are taking a "nuclear option" by slamming these taxes down instead of giving a chance for negotiation to work out.
I support Andrew Cuomo's thought process.
Obviously, we can't insist on perfection; this is pragmatic problemsolving time. But I don't think this tactic of recouping money via supertax has been well thought through. It is a band-aid on past errors by Congress.
Plus, I'd rather that 100% of the money, rather than 90% of it, be reclaimed (less the costs incurred in administration with this mess).
