Perspective on the legality of the 90% tax on $250k+ salaries for TARP recipients:
http://blogs.wsj.com/law/2009/03/18/would-an-aig-bonus-tax-pass-constitutional-muster-a-tribe-calls-yes/
Larry Tribe says the AIG bonus tax is not unconstitutional.
Friday, March 20, 2009
Monday, March 16, 2009
Executive Bonuses
Obama: AIG Bonuses an 'Outrage' to Taxpayers - Am I the only person who thinks people are irrationally freaking out about this? I guess I can see where taxpayers are coming from - they see their money going to this giant company, and going toward executive pay, at a time when their own paychecks are dwindling. The populist in me shares that theoretical outrage.
But look, there's such a thing as a contract. And usually, when you breach contracts, there are consequences (i.e. lawsuits). I'm guessing AIG has already broken as many contracts as it has found it efficient to breach, and that these last $165 million in bonuses were what they calculated to be the necessary payoff to avoid more than $165 million in lawsuits. If this is the case, I don't see any problem with paying out these executive bonuses... except that now the country - and its president - is in uproar about it.
But look, there's such a thing as a contract. And usually, when you breach contracts, there are consequences (i.e. lawsuits). I'm guessing AIG has already broken as many contracts as it has found it efficient to breach, and that these last $165 million in bonuses were what they calculated to be the necessary payoff to avoid more than $165 million in lawsuits. If this is the case, I don't see any problem with paying out these executive bonuses... except that now the country - and its president - is in uproar about it.
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