Josh Marshall on AIG bonus bill

Frankenstein:

If you have a household income over $250,000, and you receive a bonus, 90% of that bonus would be taken back in taxes -- through a mix of income and excise taxes.

This strikes me as pretty ill-advised on a couple levels.

First, what's to stop the companies from just folding the 'bonuses' into straight salary income? In which case, the whole thing goes out the window?

Second, this cuts a pretty broad swathe. You don't want CEOs who drove their companies into the ground pulling down multi-million dollar bonuses from companies that wouldn't even exist any more without big taxpayer handouts. And the folks at AIGFP who played a big part in driving the whole economy into the ditch with their reckless and possibly criminal behavior shouldn't big reaping big rewards of taxpayer money.

But it's not clear to me why a couple, both of whom work in the financial services industry, and make $150,000 each should essentially have their entire bonuses taken back in taxes.

This seems like just another example of perverse outcomes from the 'worst of both worlds' approach we're taking to the whole finance industry bailout -- keep the same people in charge of the institutions, keep effectively insolvent institutions afloat, but throw a lot of federal dollars in their direction and put in place fairly draconian tax provisions for money that's spent in ways we find either wasteful or offensive.

Posted via web from jimnichols's posterous