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Poll: Public Approves of 90% Bonus Tax
A new Rasmussen poll finds solid approval for the proposed 90% bonus tax: 57% in favor, to only 35% against.
And the AIG bonuses have now left the company in a very precarious position, with 67% agreeing that the federal government should refuse to provide the company with any further financial support.
At the same time, 81% say Congress does not have the right to raise taxes on all Americans retroactively -- though clearly, there's an exception to this general rule.
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Josh
Elana
Matt
Eric
C'mon, as long as extralegal measures are only taken against evildoers, what's the problem?
March 23, 2009 11:59 AM | Reply | Permalink
There doesn't appear to be anything extralegal about this bill either.
http://www.latimes.com/news/nationworld/nation/la-na-aig-legal20-2009mar20,0,468056.story
http://www.bloomberg.com/apps/news?pid=20601087&sid=aC_hgTeumc70&refer=worldwide
March 23, 2009 12:07 PM | Reply | Permalink
I believe the bonus tax bill passed by the House applies to bonuses awarded in 2009 or later; not a retroactive tax.
The retroactive tax question from the survey could be an attempt to conflate matters.
March 23, 2009 12:03 PM | Reply | Permalink
I agree - the bill is retroactive only in that it is now March and the bonuses were paid earlier in the year.
It would be very difficult to reach back into 2008 to tax any bonuses paid then. The tax year has ended and people have already filed their tax returns.
March 23, 2009 12:13 PM | Reply | Permalink
This bill stinks. Don't get me wrong...on a gut level I would like nothing better than to stick it to the financial wisards who created this mess, but then reason kicks in. True, paying bonuses to execs during a time like this smells like the steaming pile of crap it is, but do we really want to set the president that government can tax undesirables into oblivion? Really? Is this a good idea? How long before "let's tax the shit out of those nasty bankers" becomes "let's tax the shit out of our political rivals?"
March 23, 2009 12:21 PM | Reply | Permalink
You'ld prefer the 94% tax rate for top earners in 1944-45?
March 23, 2009 12:30 PM | Reply | Permalink
1. The new tax is NOT 'retroactive' - since these kinds of bonuses (on TARP funds) are brand new. They are NOT a pre-existing tax rate on a pre-existing kind of income. So all this inane talk of 'ex post facto' prohibitions is completely off base. Neither does it amount to a 'bill of attainder', since said prohibition applies only to criminal acts.
2. 'Retroactive' assessments are nothing new. They work the other way as well - with retroactive BENEFITS often being granted back to certain important dates in the timeline of certain acts or laws. (Many people receive retroactive BENEFITS in Social Security and other types of compensation cases. Yet I do not hear anyone complaining abot THESE types of 'Retroactive' laws.
In short - these bonuses are a completely new kind of financial benefit (paid out of funds partially composes of taxpayer bailout funds) - and therefore the tax rate set for them is completely new - and not 'retroactive' in any way.
And YES - to the previous poster - I would LOVE to see a return to the 95% top tax rate of the 1950s.
March 23, 2009 1:06 PM | Reply | Permalink
My only objection to the House Bill is that it may apply too broadly and, thereby, may reach beyond its valid purpose. The valid purpose of the bill is to recoup government funds that were intended to restore the economy, not to enrich individuals.
For zombie financial institutions, the tax bill makes sense. Zombie institutions have no meaningful funds of their own and all money being spent on executive bonuses is really tax payer money. Executives at zombie institutions should not be heard to complain about the bill because they would get nothing -- not even their base salaries -- if not for the government intervention.
For financial institutions that are solvent even without TARP funds, though, the tax bill makes little sense. These institutions have their own funds, and they may have participated in the TARP program only at the urging of the Treasury. The money being paid to executives at these firms can realistically be called the institution's funds, not public funds.
As I see it, the problem is that the House Bill's new tax provision applies to executives at all institutions that received $5+ billion in TARP funding. A flat amount like that, even as high as $5+ billion, may include solvent institutions. I would have instead tied the applicability of the new tax provision to the percentage of the government's stake in the institution. Under this approach the new tax would apply to executives at institutions in which the government now owns a 51%* or higher stake, regardless of the total amount of TARP funding that went to the institution.
(I picked 51% because it means that the government has a controlling interest. A larger percentage could be used, though, to ensure that only zombie institutions are covered.)
March 23, 2009 1:26 PM | Reply | Permalink
If you like this thread, please don't forget (as I initially did) to recommend it.
March 23, 2009 1:29 PM | Reply | Permalink