Thursday, March 19, 2009

Jeez Senator what a novel solution - get them all to commit harakiri!

Iowa Republican Senator Charles Grassley

A Vow To Tax Back Bonuses
U. S. Congress could introduce legislation on AIG today
Sheldon Alberts, Canwest News Service

Wednesday, March 18, 2009

Democratic leaders in the U.S. Congress, brimming with anger over US$165-million in bonuses paid to executives at American International Group (AIG), vowed yesterday to recover the funds with a special tax unless recipients returned the money voluntarily.

Senator Harry Reid, the Democratic majority leader, said lawmakers plan to introduce legislation as early as today to claw back up to 90% of the retention bonuses awarded to employees at the giant U. S. financial company, which has received US$180-billion in federal assistance to stay afloat.

"When a child breaks his curfew, he should get grounded. When someone commits a crime, he should be punished. And when an employee brings his company and our economy to the brink, he's not rewarded with multi-million-dollar bonuses paid by the taxpayers," Mr. Reid told reporters on Capitol Hill.

In a letter to AIG executives, congressional Democrats asked the company to renegotiate the bonuses and said refusal to co-operate would be met with "severe tax penalties."

New York Senator Chuck Schumer, in a speech on the Senate floor, said, "We plan to tax virtually all of it. To those of you getting these bonuses: be forewarned, you will not be getting to keep them."

Several lawmakers introduced tax bills aimed at recouping the money, including Democratic Representative Gary Peters. His bill would put a 60% tax on bonuses over US$10,000 at any company in which the government has a 79% or greater equity stake. It now holds about 80% of AIG. The special tax would be in addition to the top 35% income tax rate plus state and local taxes, making it possible to recover 100% of the bonuses, Mr. Peters said.

The tax ultimatum came amid new revelations that the bonuses included payments exceeding US$1-million each to 73 top AIG employees. The controversy has become so heated that one conservative Republican Senator, Iowa's Charles Grassley, suggested the AIG bonus recipients commit suicide out of shame.

AIG executives need to follow the "Japanese example and come before the American people and take that deep bow and say, 'I'm sorry,' and then either do one of two things: resign or go commit suicide," Mr. Grassley told a radio station in Iowa.

AIG spokesman Nick Ashooh called Mr. Grassley's remark "very disappointing."

The GOP Senator explained yesterday his comment was "rhetoric," and said that his preferred option was to use taxes to recoup the bonuses.

"What I'm expressing here obviously is not that I want people to commit suicide. But I do feel very strongly that we have not had statements of apology," he said.

AIG says it was legally bound to pay the bonuses because of contracts negotiated before the company received aid from U. S. taxpayers.

But the company's lawyers failed to recognize "it is only by the grace of American taxpayers that members of Financial Products even have jobs, let alone a pool of retention bonus money," said New York Attorney-General Andrew Cuomo.

Outstanding questions about how the bonuses were negotiated will be the focus of a congressional hearing today, when lawmakers will question AIG's chief executive, Edward Liddy, about the payments.


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