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Do you think the government could REALLY enforce the 90% bonus tax?
It seems like these slick financial firms will figure out a way to disguise bonuses as "consulting fees" or something like that. Thoughts?
Best Answer
115 points
buysideguru answered 8 months ago …
I hope not. I think politicians have created a witch hunt against inconsequential bonuses, when they really should be fixing the system. Who cares about $100 million, when we are talking about Trillions? Democrats spend millions of dollars a day on ear-marks to their cronies.
Since the US taxpayer is now the biggest investor in US Banks, we need to ensure that these banks make money. If all their talent leaves, the taxpayer is going to be stuck with a bunch of worthless companies.
Meanwhile, small start-ups will capture all the talent and profit off of the messes that B of A and Citi made
Answers
731 points
thinker70 answered 8 months ago …
The only thing they can enforce is a tough clause that PROHIBITS excess bonuses! There should only be bonuses based on actual performance and repayment of loans. In other words, covenants must be enacted that prevent loans being made in the first place unless stringent terms are agreed too that have legal clout.
As far as the argument that bonuses must be paid to keep "talent" from leaving, SPARE ME, who needs the kind of talent that makes highiy leveraged stupid bets that runs a company into the ground to the point that only a government bailout can save it at the expense of all citizens?
I am all for "fixing the system" but that would involve monumental changes, abolishing the Federal Reserve Act and the IRS along with it, putting an END to printing press money, restoring some semblance of a Gold standard and laws to prevent expansion of the money supply beyond the GDP of the country! Our money supply MUST have intrinsic value, serve as a widely accepted medium of exchange, and store of value, be inflation proof to prevent the destruction of purchasing power such as we have experienced since the FED was established in 1913! A 1913 DOLLAR is now worth about 4c in actual purchasing power, yet it is still CALLED A DOLLAR WITH THE INSIDIOUS EROSION SO GRADUAL MOST PEOPLE have not consciously been aware of this HIDDEN TAX of inflation because it is so gradual!
I would also suggest that this is not the place for partisan politics, on a practical basis there is very little difference which party is in power, they BOTH abuse the system with pork barrel politics
2082 points
alanj answered 8 months ago …
They are going to have a battle on their hands. With this tax it could be argued that they are targeting specific individuals which is prohibited ( I heard that it is a part of our Constitution). You can't do that. The reason they're trying to pass this tax is because they messed up. As part of the agreement for accepting the money from the government our government officials could have put in a provision that would have required that no bonuses where to be paid out. There actually was a provision just for that but the Dem party took it out. If you want to blame someone it's them. So paying out these bonuses was perfectly legal.
One other thing- People keep referring to these payouts as bonuses. What's a bonus? It's an unexpected payment from the company to an employee. That's not what these are. These are what I would call "income compensation payments" ( ICP's). Of which the company was under contract to pay out. When the previously mentioned provision was removed they had to make the payments. The only thin this tax is going to do is cause those "bonuses" to increase in size to cover the additional tax which will be passed on to the consumer. They may not even have these "bonuses" anymore. They will simply increase the wages/salaries to compensate for the contractual lost income.
Don't get me wrong. I'm not happy about the payments that where made. But it's our lawmakers who messed this up, not the company who made the payments.There was no need to remove the provision previously mentioned. Their are already laws and procedures to take care of such matters. They are called "Lawsuits". A 90% tax is a job killer (who's going to work for that?), or will result in even higher wages/salaries.
3963 points
MNSL answered 8 months ago …
Thinker70. It is a great answer:
Who needs the kind of talent that makes highly leveraged stupid bets that runs a company into the ground to the point that only a government bailout can save it at the expense of all citizens? You are absolutely right.
These global professional fund managers charge management fees in addition to higher remuneration. Still they can not manage money professionally.
Average individual never get intelligent advice from these professionals. Everybody was into highly risk bet instruments, property and commodity etc.
This is the time to become money manger ourselves rather than handing over it to somebody.
It is high time to think about taking insurance polices as well.
Globally many innocent parties have lost entire life savings due to these professionals. As Thinker70 said system should be fixed. Otherwise there will be more and more worst bubble in the future.
