AIG uses bailout money to pay employees.

[Kevin]

Originally Posted by KSig RC

The thing is, these "bonuses" are usually a guaranteed part of compensation in firms like these - usually with a "bonus minimum" with the ability to go above that due to earnings.

This isn't a "reward" - even if the guys sucked, this is how it works in that field.

Yep.

And as far as Congress trying to require these guys to give their bonuses back, they can't do that because they can't impair the obligations of contract.

As far as trying to tax it at 90%, it's arguable they can't do that either. IMHO, that sort of confiscatory, punitive taxing policy amounts to nothing more than a taking. Heck... in places like NY where the state income tax is >10%, many executives would actually have to pay more in taxes than they were obligated to receive!

This is utterly ridiculous. It's grandstanding at its worst.

[Coramoor]

Originally Posted by Kevin

Yep.

And as far as Congress trying to require these guys to give their bonuses back, they can't do that because they can't impair the obligations of contract.

As far as trying to tax it at 90%, it's arguable they can't do that either. IMHO, that sort of confiscatory, punitive taxing policy amounts to nothing more than a taking. Heck... in places like NY where the state income tax is >10%, many executives would actually have to pay more in taxes than they were obligated to receive!

This is utterly ridiculous. It's grandstanding at its worst.

Yep, especially when you look at the names of the congressmen that received contributions from AIG...

It's sickening.

[ASTalumna06]

Originally Posted by KSig RC

The thing is, these "bonuses" are usually a guaranteed part of compensation in firms like these - usually with a "bonus minimum" with the ability to go above that due to earnings.

This isn't a "reward" - even if the guys sucked, this is how it works in that field.

Originally Posted by Kevin

Yep.

And as far as Congress trying to require these guys to give their bonuses back, they can't do that because they can't impair the obligations of contract.

As far as trying to tax it at 90%, it's arguable they can't do that either. IMHO, that sort of confiscatory, punitive taxing policy amounts to nothing more than a taking. Heck... in places like NY where the state income tax is >10%, many executives would actually have to pay more in taxes than they were obligated to receive!

This is utterly ridiculous. It's grandstanding at its worst.

Exactly. Obama has said that he will look into the legal ramifications behind distributing these bonuses. But there are none. As long as these employees were under a contract that deemed these bonuses as a required form of payment/salary, they are entitled to them. Whether or not the company was run into the ground doesn't matter. The government, out of desperation, handed them a check without stipulations. They can't now say, "Oh, wait a minute.. we didn't say you could spend the money on THAT.."

Don't get me wrong... it's frastrating as hell. But such is life.