Friday, March 20, 2009

Taxing AIG


The United States Congress is furious that employees of AIG are receiving personal compensation that the legislators have deemed excessive and unwarranted. AIG has responded with something similar to “…it’s in the employees contract, we have to pay them…” Well the leaders of the free world, President Obama, Nancy Pelosi and Harry Reid are not going to get duped by that excuse, they have something in their back pocket, and it’s called taxation. The House of Representatives (and soon the Senate) have passed a bill imposing a 90% tax on AIG employee bonuses and in some cases taxing 100% leaving the worker with nothing. "I look forward to receiving a final product that will serve as a strong signal to the executives who run these firms that such compensation will not be tolerated," the president said in a statement.
I am not outraged as so many American’s are about executives of a U.S. bailed out company receiving a “Bonus”. But I am very scared that our citizens don’t recognize what has really happened. Let’s just review a few things. First, this is a United States Company and those receiving monies are U.S. Citizens. This is crucial in realizing that what is happening to them can happen to us. Second, the employees have a written contract to receive these funds. In our Country a contract is honored by the law. Third, the word “Bonus” is nothing more than deferred compensation. Lastly, the US Congress has passed a law targeted towards taxing a specific company.

The people receiving the “bonuses” are just like you and me, well several live a lot larger life styles than me but I am happy for them not jealous. These citizens made a deal, a contract with a company on what their job is and what they would take in compensation for doing it. None of us have read their contracts and have no idea whether they completed the tasks necessary to receive the compensation. But I am sure that under the duress AIG is currently under the employees must have fulfilled their tasks in order to get paid. This is no different than the contract I have with my kid’s orthodontist. I will pay him in full when he completes the task of making their teeth straight. He didn’t give me any guarantees that when he’s finished that my kids smile will provide them a better paying job or more dates. I may have hoped for that outcome but that wasn’t the deal.

You may say, “Fine, but they received tax payer money to keep the company afloat and without it these people wouldn’t have a job and therefore wouldn’t be getting a bonus”. Perhaps, but the company didn’t go under, they didn’t go into bankruptcy, they continued on running the business. Our representatives made the decision to spend our money to keep that business from going into bankruptcy. Our government made the decision to spend billions of dollars to make sure that these people who are now receiving bonuses stayed in action. You can’t have it both ways. The deal made by Obama, Pelosi and Reid was we need AIG not to fail, so here’s the money. Senator Dodd from Connecticut even had added into the deal that the bonuses were protected. That was the deal, the contract, the agreement.

So now we have an outraged public and every politician is deflecting this anger onto AIG as greedy people, with no conscience and self-serving one Senator even calling for them to commit suicide. To address the grumblings of its people our leaders have decided they have the authority to specifically tax a particular company or person in any manner they choose. Think about this, what is stopping them from coming after you? Do you think you’re safe because you “don’t make enough money”? Ask yourself, how much is not enough? Do you think your business is safe because “I’m just a small business owner?” Really, how small is too small? Perhaps you have said “well I’m not taking government money”. Is socialized health care, Medicare, social security, food stamps, mortgage assistance, or State colleges government assistance?

We all need to peel back the onion and see how we are losing freedoms and liberties at an alarming rate.

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