# Democrats Pass 90% tax on AIG bonuses **URL:** \ **Category:** Great Debates\ **Created:** [March 19, 2009, 7:06pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058 "2009-03-19T19:06:44Z")\ **Posts on this page:** 20\ **Page:** 12
**Author:** ![Rune](https://avatars.discourse-cdn.com/v4/letter/r/e68b1a/32.png) [@Rune](https://boards.straightdope.com/u/Rune)\ **Post date:** [March 21, 2009, 12:48pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/221 "2009-03-21T12:48:13Z")
> [@Sam\_Stone](#): > > [Banker fury over tax ‘witch-hunt’](http://www.ft.com/cms/s/0/4ff2f77e-1584-11de-b9a9-0000779fd2ac.html) > > Yeah, this is working out real well. “witch hunt” has really inflated in value if it has come to mean depriving some rich banker guy of another million dollar payout. Used to be about burning people at the cross and such lovely stuff - and [removing dicks of men still alive](http://beeqube.com/article/genita). Which I should assume is a lot more uncomfortable than having to forego another Porsche. First Deutsche Bank got US bailout money and then they poach the most talented employees. Good for them. The clever always cheat the less clever (=US taxpayers). Perhaps Deutsche Bank is using the very money it got from US taxpayers to pay for hiring these people. > [@](#): > > Among those institutions are Goldman Sachs Group Inc. and Germany’s Deutsche Bank AG, each of which received roughly $6 billion in payments between mid-September and December 2008, according to a confidential document and people familiar with the matter. [Top U.S., European Banks Got $50 Billion in AIG Aid](http://online.wsj.com/article/SB123638394500958141.html) - in any case, as has already been posted in this thread, a lot of those receiving bonuses aren’t even with AIG anymore. Including “Eleven of the individuals who received “retention” bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million”. Fat good it is going to do for AIG retaining their talented people, by throwing bonuses at people working in other companies. And a lot of the rest receiving bonuses worked in the very sections of AIG that brought such astronomic losses that it ruined the company. If that is talent, then God protect us from talented people. btw. [http://beeqube.com/picdump/aigmemo.jpg](http://beeqube.com/picdump/aigmemo.jpg) [http://beeqube.com/picdump/aigmemo2.jpg](http://beeqube.com/picdump/aigmemo2.jpg) put the damn thing out of its misery. ---
**Author:** ![pinkyvee](https://avatars.discourse-cdn.com/v4/letter/p/6de8d8/32.png) [@pinkyvee](https://boards.straightdope.com/u/pinkyvee)\ **Post date:** [March 21, 2009, 7:29pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/222 "2009-03-21T19:29:42Z")
> [@Sam\_Stone](#): > > Can this really be constitutional? Can you write a tax law so narrowly defined that it singles out a handful of people? I suppose it is constitutional. But is it wise?:smack: This gives me the _“You might be next”_ willies. :dubious: I think this knee-jerk emotional , and more importantly, political response will fall into the\*\* unintentional consequences\*\* category of future regrets. ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [March 21, 2009, 7:40pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/223 "2009-03-21T19:40:18Z")
> [@Sam Stone](#): > > How many times do I have to repeat that the people in question are not the ones who caused the problem? These people are not the wizards who came up with the flaky financial instruments or pushed them into the market. Those people are long gone from AIG. It doesn’t matter how many times you \*repeat \*that. \*Citing \*it, just once, would be sufficient. So where \*did \*you get that information? And can you reply to **Voyager** ’s refutation, already provided? ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [March 21, 2009, 7:56pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/224 "2009-03-21T19:56:22Z")
I also would like less attention paid to this small group of rapacious plunderers/innocent victims in their communion dresses, whichever. What needs attention is how closely the interests of financial institutions have become intertwined with the interests of the nation. As a lifelong lefty, been railing about this for quite some time. If our interests and theirs are not intimately connected, then they can thrash about and fail, and the rest of us can toddle along quite well without them. In that instance, strict and intrusive regulation is not necessary, in that instance, the market can police itself with Darwinistic principles of a ruthless struggle for survival. And _mazel tov_, much good may it do them. But if any institution is “too big to fail”, then all bets are off, this simply does not apply. If the health and well-being of these entities can reflect with dire consequence on our own well-being, then we have every right…nay, _duty_!..to stick our regulatory noses up any orifice we please. Seems with the decades long dominance of the right, we have achieved the worst of both worlds: a financial sector that is far, far too cozy with our governance, is permitted if not encouraged to grow out of any sane proportion, and must be saved by us if it fails. All the downsides of socialism, none of the benefit, all of the risk of capitalism, none of the security. Don’t much like it. ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [March 21, 2009, 8:50pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/225 "2009-03-21T20:50:05Z")
Gotta agree with that - I’ve had quite enough of top management saying their huge salaries and bonuses are because of the risks they assume _when they aren’t assuming any._ Where’s the entrepreneurial capitalism there? It’s been no more tolerable to hear them and their apologists speak of their being the productive ones, that any success their companies have had is solely because of their hard labor, and implicitly dismissing anything the thousands of others in the company do or contribute. It’s easier to stiff them if you can make yourself see them that way, naturally. Let’s hope that this pathological culture of this latest Gilded Age is being cured, that the strategy of privatizing gains while socializing losses, of misallocating responsibility and rewards, of seeing fellow human beings as “externalities”, is coming to a close. It was pretty damn painful the last time we had to do it, though. ---
**Author:** ![Rolken](https://avatars.discourse-cdn.com/v4/letter/r/df788c/32.png) [@Rolken](https://boards.straightdope.com/u/Rolken)\ **Post date:** [March 21, 2009, 8:55pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/226 "2009-03-21T20:55:48Z")
> [@Magiver](#): > > First of all, we do not live in a democracy. We vote for people to represent our best interests. They’re not hired guns. Well, in the interest of fighting micro-ignorance, we live in a representative democracy as opposed to a direct democracy. What these yahoos want is mobocracy. > [@Der\_Trihs](#): > > The last thing they need is more incompetent greedheads. It’s the people attracted by that “big pay for executives regardless of performance” corporate model who screwed the company and to a large degree the economy up in the first place. Yeah, working for another company because it pays better is sure greedy. I can’t believe anyone would commit such an immoral act, when these people committed the clear sin of working for companies that received bailout money and getting paid well. :rolleyes: > [@elucidator](#): > > I also would like less attention paid to this small group of rapacious plunderers/innocent victims in their communion dresses, whichever. What needs attention is how closely the interests of financial institutions have become intertwined with the interests of the nation. As a lifelong lefty, been railing about this for quite some time. Hear, hear. But, sadly, that’s a nuanced and controversial problem that’ll never get airtime on CNN… ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [March 21, 2009, 9:07pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/227 "2009-03-21T21:07:10Z")
Interesting claim, **Sam** , that Europe’s banks are going to be better plays for compensation than America’s banks and that Deutsche Bank and that group will “pick off” the best talent. Interesting in context of the press compensation of banker has had [in the EU](http://www.nytimes.com/2009/02/07/business/worldbusiness/07bonus.html) > [@](#): > > … an increasing number of European banks are limiting or canceling the high salaries and bonuses once seen as an inalienable right. … Banks that choose not to show moderation — even the small band of banks that did not receive government help, like Barclays in Britain and Deutsche Bank — run the risk of angering shareholders, members of the public and politicians … “There’s no opposition to giving bonuses or high pay to people who are successful,” said Mr. Bolkestein, now a professor at the universities of Delft and Leiden in the Netherlands. “But there should be no extra money for people who have failed.” > > And, in some cases, no jobs. Royal Bank of Scotland Group fired seven nonexecutive directors Friday as part of a restructuring agreement with the British government … These are the people who failed and the mood there is no different than it is here. But hey, Barclay’s and Deutsche didn’t get bail-out monies, so those banks may be willing to thumb their noses at the stockholders’ moods. Right? [Seems to be a “no.”](http://emac.blogs.foxbusiness.com/2008/12/03/us-banks-lag-europe-in-executive-bonus-cuts/) > [@](#): > > At a time when the US taxpayer is bailing out Wall Street with record capital injections, US firms lag European banks when it comes to executives forgoing bonuses. > > UBS, Deutsche Bank and Barclays PLC have either pulled bonuses for top executives, or executives there have voluntarily forfeited them. Nah. These highly compensated workers really don’t have too many great options. The better bet is to fight this legally (I understand there is a constitutional argument) or better yet to weather it out by just giving it back and get better compensation again after the public has moved along in a year or two, just by having the contract written as salary rather than “bonus” … but still overpaid for what they do. ---
**Author:** ![Der\_Trihs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/der_trihs/32/233_2.png) [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)\ **Post date:** [March 21, 2009, 9:26pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/228 "2009-03-21T21:26:08Z")
> [@Rolken](#): > > [QUOTE=Der Trihs] > The last thing they need is more incompetent greedheads. It’s the people attracted by that “big pay for executives regardless of performance” corporate model who screwed the company and to a large degree the economy up in the first place. Yeah, working for another company because it pays better is sure greedy. I can’t believe anyone would commit such an immoral act, when these people committed the clear sin of working for companies that received bailout money and getting paid well. :rolleyes: [/QUOTE] Raking in huge amounts of money even as you ruin the company you work for IS greedy. And grabbing money given to save the company to line your own pockets is ALSO greedy. And if their company needs bailout money, they _SHOULDN’T_ be paid extravagantly. They are not “getting paid well” - they are being paid _extravagantly_; that’s what we are talking about. That money is to keep the company alive so their collapse doesn’t wreck the economy further, not to pay for their third gold bathtub. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [March 21, 2009, 9:43pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/229 "2009-03-21T21:43:13Z")
Let us also put this in context. These few “bonuses” are not the problem; the whole set-up is [the problem](http://www.economist.com/finance/displaystory.cfm?story_id=13036810). > [@](#): > > Over the past 25 years, the cost of finance has been low and asset prices have generally been rising. That has encouraged banks to use more leverage in order to earn high returns on equity. The process of lending money against the security of assets, or trading assets with the banks’ capital, helped to push asset prices even higher. A sizeable proportion of the profits that resulted from all this activity was then handed out to employees in the form of wages and bonuses. > > But when asset prices started to fall, the whole system unravelled. Banks were forced to cut the amounts that they had borrowed, putting further downward pressure on prices. The “shadow banking system”, which relied on bank finance, started to default. The result was losses that outweighed the profits built up in the good years; Merrill Lynch lost $15.3 billion in the fourth quarter of 2008 alone, compared with the $12.6 billion of post-tax profits it earned in 2005 and 2006 combined. > > In effect, executives and employees were given a call option on the markets by the banking system. They took most of the profits when the market was booming and shareholders bore the bulk of the losses during the bust. … Henceforth two things need to be done. The first is that the trigger for incentives (as well as the payments themselves) need to be longer-term in nature. Bonuses could still be paid annually but based on the average performance over several years; if bankers are rewarded for increasing the size of the loan book, their pay-off should be delayed until the borrower has established a sound payment record. The effect would be to claw back profits earned by excessive risk-taking. > > The second is that the banks’ capital has to be properly allocated. If traders are given licence to use leverage to buy into rising asset markets, then the trading division should be charged a cost of capital high enough to reflect the risks involved. > > Impossible, the banks might say: our star employees will never tolerate such restrictions. But if there is ever going to be a time to reorganise the incentive structure now must be it. A threat to quit will be pretty hollow, given the state of investment banking. And few traders will have the clout to set up their own hedge funds in today’s market conditions. In any case, the greediest employees may be the ones most likely to usher in the next banking crisis. Better to wave them goodbye and wish good luck to their next employer. And [this](http://www.economist.com/finance/displaystory.cfm?story_id=12650356) from back in November. > [@](#): > > “THE villagers are at the gates of the castle with burning torches,” says one compensation consultant. The sheer amount that bankers are paid riles people at the best of times. When the economy is ravaged and the source of the trouble is banks themselves, the pitchforks come out. Politicians on both sides of the Atlantic are gleefully grilling bankers on pay. … Bankers are desperately trying to placate their critics. … These few are the nails that are sticking out the most obviously and an angry public with a bunch of hammers could indeed end up doing more harm than good in their desire to give them a good pounding. To not have handled these bonuses better knowing that this has been the public’s mood was just stupid, even if it was somehow “logical”, but … Will the public still have any interest left to actually notice that the whole compensation structure has some screws loose and actually follow through in fixing it for the long haul? I wouldn’t get our hopes up. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [March 21, 2009, 9:57pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/230 "2009-03-21T21:57:26Z")
It was a special house vote and required a 2/3 rds majority to pass. The vote was 328-93. Are there only 93 repubs in the house now? They had the numbers to easily vote it down. They did not. Those dems ,those bad bad dems. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [March 21, 2009, 10:58pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/231 "2009-03-21T22:58:32Z")
It seems that Obama’s administration at least [understands that the whole set-up is the problem.](http://www.nytimes.com/2009/03/22/us/politics/22regulate.html?_r=1&partner=rss&emc=rss) > [@](#): > > The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said. … In unveiling the regulatory plan this week, President Obama would signal to Europe that he intended to crack down on the risk-taking and other free-wheeling practices by the financial industry that resulted in the global economic meltdown. > > France and Germany especially have suggested that the better response is not more government spending but tighter regulation. … For [context:](http://news.xinhuanet.com/english/2009-03/19/content_11037133.htm) > [@](#): > > Financial markets must be subject to tight supervision and regulation, Dutch Prime Minister Jan Pieter Balkenende and German Chancellor Angela Merkel wrote in an article published on Thursday by Dutch daily NRC Handelsblad and several other European newspapers. > > ``` > The two leaders called on the United States to regulate the financial sector more tightly than Washington has been willing to do up to now. > > "It is indispensable that market forces are checked by a robust global framework of common values that sets clear limits to excessive and irresponsible action," Balkenende and Merkel wrote. > > Balkenende is supporting the German and French side in the transatlantic debate on how to take on the economic crisis. The United States accuses the European Union of doing too little to stimulate the economy. > > The opinion article comes ahead of the G20 summit in London next month, where Balkenende will attend as a member of the French delegation. EU heads of government are meeting in Brussels on Thursday and Friday to discuss the crisis. ... The Dutch and German leaders wrote that besides regulating the private pools of capital, including hedge funds, the governments should "tackle tax havens and put an end to a bonus culture that leads to unacceptable risks." > > In a separate letter to fellow EU leaders, Angela Merkel and French President Nicolas Sarkozy wrote that the EU should consider capping executive pay and adopt a sanctions mechanism for states that are uncooperative on regulation and transparency. > > ``` ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 22, 2009, 4:08am UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/232 "2009-03-22T04:08:21Z")
> [@ElvisL1ves](#): > > It doesn’t matter how many times you \*repeat \*that. \*Citing \*it, just once, would be sufficient. > > So where \*did \*you get that information? And can you reply to **Voyager** ’s refutation, already provided? I actually didn’t refute that part of it. I refuted the part that says that unless you pay big bonuses, even when you are losing money like crazy, everyone will leave and doom will ensue. But I can refute it. First, clearly everyone getting bonuses was around before this thing went south. It is true that the CEO is gone. But what about the other people. We wouldn’t expect clerks and secretaries and newbies to be able to do anything about a problem, but they aren’t making a ton of money, so they keep their bonuses, which is only fair. As for the rest, if you are making, say $200K before bonuses, you should damn well know enough to know when something stinks, and you should speak up if you do. I don’t make that kind of money, but I am senior enough so that if my company was screwing the pooch I’d say something. I might or might not get listened to, but I’d speak up. If none of these geniuses spoke up, they either couldn’t figure out that they were doing something wrong, in which case they don’t deserve their big checks, or they were complicit in the bad policy, in which case they also don’t deserve their big checks. The bankers might want to be less mad at Congress and more mad at a company that sold them insurance that they can’t afford to make good on. It might be a bit unfortunate that they got caught too, but if AIG people hadn’t been so greedy this wouldn’t have happened. Remember, Merrill pulled the same shit. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 22, 2009, 4:19am UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/233 "2009-03-22T04:19:05Z")
> [@DSeid](#): > > Let us also put this in context. These few “bonuses” are not the problem; the whole set-up is [the problem](http://www.economist.com/finance/displaystory.cfm?story_id=13036810).And [this](http://www.economist.com/finance/displaystory.cfm?story_id=12650356) from back in November.These few are the nails that are sticking out the most obviously and an angry public with a bunch of hammers could indeed end up doing more harm than good in their desire to give them a good pounding. To not have handled these bonuses better knowing that this has been the public’s mood was just stupid, even if it was somehow “logical”, but … Will the public still have any interest left to actually notice that the whole compensation structure has some screws loose and actually follow through in fixing it for the long haul? I wouldn’t get our hopes up. It appears that the Fed and Treasury and the Congress are all working on a new regulatory structure, but I’m glad they’re not rushing it. The bonuses are a symptom of two things: first, the gap between the rich and everyone else, which has been pissing people off from before the crash, and second, the spreadsheet fantasy land the investment bankers are living in, which involved the invention of ever more arcane instruments which gave good returns because of the underlying risk, risk either lied about thanks to the rating agencies or swept under the 1% probability carpet of their risk models. Taxing the bonuses isn’t going to fix any of that, but not doing it will likely mean the banks and AIG get no more money, which I’m afraid they are going to need. I wonder if those getting the bonuses think that their being on the street like the people at Lehmann is a better outcome than keeping their jobs and losing their bonuses. ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [March 22, 2009, 6:56am UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/234 "2009-03-22T06:56:46Z")
> [@Der\_Trihs](#): > > That money is to keep the company alive so their collapse doesn’t wreck the economy further, not to pay for their third gold bathtub. You’re really so worried about that 0.1% that you’re in favour of the government making a massive power grab, sabotaging the whole bailout, and egging on an ignorant mob all at the same time? And people say libertarians are penny-pinchers. :rolleyes: ---
**Author:** ![Stratocaster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/stratocaster/32/16393_2.png) [@Stratocaster](https://boards.straightdope.com/u/Stratocaster)\ **Post date:** [March 22, 2009, 10:40am UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/235 "2009-03-22T10:40:36Z")
> [@Voyager](#): > > As for the rest, if you are making, say $200K before bonuses, you should damn well know enough to know when something stinks, and you should speak up if you do. I don’t make that kind of money, but I am senior enough so that if my company was screwing the pooch I’d say something. I disagree. The pricing and actuarial details behind products as complicated as the toxic ones AIG created are mind-numbingly complex. How to hedge, reserve, account, etc.–these would not necessarily have come together in some obvious “this is toxically risky” package. I’ve worked in the financial services industry for about 25 years, and the days of vanilla whole life driving the industry are long gone. I’ve seen products at other firms WAY less complicated that were as far from intuitive as you can imagine. And their forecasts and modeling, also to the short-sightedness of those at the top, may have been way too optimistic, not accounting for the type of low-end, market dropping off a cliff scenario that occurred. I think there were senior people at AIG who were the champions of the strategy who were aware of the total risk, but rolled the dice anyway. As Sam points out, I’ve read in several places (don’t have a cite handy at the moment, so feel free to disregard as you see fit) that these guys are long gone. But it’s also absolutely plausible to me that the key staff who remain have critical expertise, and their actual knowledge of the grave risk that was taken, while it was taken, ranged from “none at all” to a vague “I hope those guys know what they’re doing.” ---
**Author:** ![Der\_Trihs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/der_trihs/32/233_2.png) [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)\ **Post date:** [March 22, 2009, 11:10am UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/236 "2009-03-22T11:10:13Z")
> [@Grumman](#): > > You’re really so worried about that 0.1% that you’re in favour of the government making a massive power grab, sabotaging the whole bailout, and egging on an ignorant mob all at the same time? And people say libertarians are penny-pinchers. :rolleyes: What makes you think it’s “1%” ? What makes you think that if no stink had been raised they wouldn’t have just shoved more and more of the bailout into their own bank accounts and let AIG burn ? And it’s not a “power grab” for the government to demand accountability for it’s money, any more than it would be if some company had bought out AIG. If they don’t want the government to meddle, then they shouldn’t take the government’s money. The government has a right to take an interest in how the money it hands out is spent. Given how people freak out about the merest possibility of someone on welfare possibly getting money “they don’t deserve”, it’s disgusting to see people defend the right of these incompetent parasites to guzzle far more money, after having done far more harm. Oh; and AFAIKT most people don’t think that libertarians are penny pinchers. They think libertarians are sociopaths, or just fools. ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [March 22, 2009, 11:50am UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/237 "2009-03-22T11:50:54Z")
> [@Der\_Trihs](#): > > What makes you think it’s “1%” ? It’s not, it’s 1/10th of 1%. 165,000,000 (the bonuses that the government is going after) divided by 170,000,000,000 (the entire bailout) is equal to approximately 0.1%. > [@](#): > > What makes you think that if no stink had been raised they wouldn’t have just shoved more and more of the bailout into their own bank accounts and let AIG burn ? Because they _aren’t_ shoving more money into their own bank accounts, they’re trying to pay bonuses that were already required by legally binding contracts, which they were specifically allowed to do under the terms of the TARP. It’s the _government_, not AIG, which is trying to change things after the fact. > [@](#): > > And it’s not a “power grab” for the government to demand accountability for it’s money, any more than it would be if some company had bought out AIG. If they don’t want the government to meddle, then they shouldn’t take the government’s money. The government has a right to take an interest in how the money it hands out is spent. How are they supposed to make an informed decision whether or not to accept the government’s money when the government has decided that they can change the rules whenever they feel like it? > [@](#): > > Given how people freak out about the merest possibility of someone on welfare possibly getting money “they don’t deserve”, it’s disgusting to see people defend the right of these incompetent parasites to guzzle far more money, after having done far more harm. You don’t seem to understand that there is a time to change the terms of an agreement, and that is before both sides have committed themselves to that agreement. If the government didn’t want people at AIG to get paid these bonuses, they should have said so, instead of explicitly stating that these payments were not prohibited and then going back on their word. There are two choices here: to prop up the failing corporations (with rules defined _beforehand_), or to let them die. The third option, the one the government is taking, combines the worst attributes of both, by giving them the money and then sabotaging the possibility of getting that money back. ---
**Author:** ![\_Undecided\_Adrian](https://avatars.discourse-cdn.com/v4/letter/_/eada6e/32.png) [@\_Undecided\_Adrian](https://boards.straightdope.com/u/_Undecided_Adrian)\ **Post date:** [March 22, 2009, 12:54pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/238 "2009-03-22T12:54:38Z")
Why should the probability of getting the bailout money back depend on the bonus tax? Do you think AIG customers won’t deal with people who are required to pay a special tax? AIG’s reputation was already trashed, everybody knows they were practically bankrupt, they had a bad business model, but they are now backed by the government, which needs to protect its investment and has deemed them too big to fail. Those are the facts that should concern AIG customers, not what their sales rep is earning, and I bet those rational capitalists will do exactly that. ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [March 22, 2009, 1:09pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/239 "2009-03-22T13:09:36Z")
> [@'\[Undecided](#): > > Adrian;10960932’]Why should the probability of getting the bailout money back depend on the bonus tax? Because you need people to be willing to work for AIG if you want a return. But when working at AIG means you don’t have job security, you don’t get paid what you were promised, the government is using you as a scapegoat for your predecessor’s actions, and people are threatening to kill you, people aren’t going to be willing. ---
**Author:** ![MichaelQReilly](https://avatars.discourse-cdn.com/v4/letter/m/df705f/32.png) [@MichaelQReilly](https://boards.straightdope.com/u/MichaelQReilly)\ **Post date:** [March 22, 2009, 2:27pm UTC](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058/240 "2009-03-22T14:27:46Z")
> [@Grumman](#): > > How are they supposed to make an informed decision whether or not to accept the government’s money when the government has decided that they can change the rules whenever they feel like it? Frankly, those are the breaks. Surely you’ve heard the saying that beggars can’t be choosers, right? [Previous page](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058.md?page=11) [Next page](https://boards.straightdope.com/t/democrats-pass-90-tax-on-aig-bonuses/490058.md?page=13)