US House Approves To Slap AIG Bonuses With 90% Tax

House Democrats have taken action against the AIG bonuses. A bill was approved to slap AIG employees making over $250K with a ninety-percent tax. This also extends to other companies that receive at least $5 billion in bailout funds.

Perhaps one of the biggest things happening in the United States right now would be the uproar on the fat bonuses that AIG plans to give out to employees. It was revealed that AIG received at least $170 billion in federal bailout money. So far, there was much uproar in Washington DC in this interesting revelation. News came into light that about $165 million in bonuses would get paid out. During 2008, it was revealed that AIG spent almost $1 million on retreats and vacations. It was after AIG received bailout money in that same year. Overall, the anger directed towards AIG is more than understandable. However, AIG defended the bonuses. According to current chairman and CEO Edward Liddy, AIG is contractually obligated to pay out the bonuses. He explains that if they are not paid, there will be severe ramifications. But, that does not look to be a convincing explanation. Many in Washington DC are angry. Perhaps anger in Washington should be considered the least of the worries. Liddy explained to the US Congress that he was hesitant to reveal the names of employees getting paid bonuses. This is due to AIG receiving death threats. Liddy will read from one of the death threats received. “All the executives and their families should be executed with piano wire around their necks,” Liddy read from one note. He continued reading. Another note threatened to look up the names of the CEOs and their families. Today, the United States House of Representatives voted. A bill has been approved to slap the AIG employees making $250K and more. If they receive bonuses, then they will be subject to a ninety percent tax. In short, you can be subject to a tax on your bonuses if you are an AIG employee and you make over $250K. However, this would not extend just to AIG. This also extends to companies receiving at least $5 billion in bailout cash. “We want our money back now for the taxpayers,” said Democratic House Leader Nancy Pelosi of California. At first, House Republicans gave opposition but soon joined with House Democrats. The vote to heavily tax the bonuses was approved by 328-93. According to Democratic Representative Charles Rangel of New York, local and state governments will probably take the remaining ten-percent of the bonuses. In short, the bonuses are subject to federal, state, and local taxes. The United States Senate wants implement an excise tax. It could go up to seventy percent. Still, this could prove to be potential ammo for the GOP to use in the future elections. So far, New York State Attorney General Andrew Cuomo could possibly come out as the “hero” out of this. He could be considered the underdog hero in this mess. So far, he has issued subpoenas for the names of those that received the bonuses. In this respect, this has propelled Cuomo into the spotlight. One could ask: How long will Cuomo’s light shine? Democrats and Republicans agree that Cuomo should not be ignored or underestimated. The AIG incident may have made a political star out of Cuomo. So far, United States President Barack Obama took the blame for the bonuses. He said at a town hall meeting: “Listen, I’ll take responsibility. I’m the President.” However, he did add that the contracts were not his fault. Obama does have a point in that respect. “We didn’t grant these contracts,” Obama said. In that respect, Obama does make a point. Back in 2008, Obama was not the United States President. In regards to the uproar, Obama said to those in the Capitol to come talk to him. However, it was revealed that AIG donated $100K to Obama's campaign. He was joined Pelosi. Pelosi fired back at the suggestion of House Democrats deserving blame in the AIG bonuses. She explained that one needs to go back to September 16. “The CEO compensation issues were completely resisted by the Bush administration, so we sweeping up after them,” Pelosi explains. However, the hefty taxes are not the only thing AIG has to worry about. M. Jodi Rell, the Governor of Connecticut is launching an investigation into AIG. One could ask: How does Connecticut fix into the mix? In justification of the bonuses, AIG cited Connecticut law. Connecticut’s Governor is not too thrilled about the bonuses either. Rell said that the money is to stabilize the financial market and not reward the AIG executives. Perhaps Rangel is right that the bonuses will inevitably be nullified.