Go Ahead and Tax AIG Employees - Just As Long As You Go First

Recent accounts indicate that Congress is showing its compassionate side when it comes to taxing the bonuses paid to AIG employees. Apparently realizing that 95% was a ridiculous outrage, they generously dropped the rate to a far more compassionate 90% in recently crafted bills.

As most are by now aware, employees of AIG received millions of dollars in bonus payments under the terms of contracts in force long before Congress wanted to prove that they could screw up the private sector even better than they have managed with the government. These employees are apparently guilty of fulfilling the terms of those contracts, none of which stated that the company had be be financially sound. If Congress wanted to limit these contractually obligated payouts, something should have been said when the money was first handed over. If they want to demand that moving forward existing contracts be renegotiated and new contracts have specific limiting provisions written in, that also is fine.

What is not reasonable or acceptable is to rewrite the rules after the game is over just so Congress can declare themselves the winner. Anyone with a sixth grade education and access to a local newspaper has been aware of Wall Street bonuses and how they work for the last twenty years or more. For Representatives and Senators to go in front of the national media and claim "I had no idea . . . " can charitably be described as disingenuous. The publicly available facts clearly indicate that virtually every member of congress who has opened his or her mouth on the AIG business is either a liar, an idiot, or both.

Setting aside silly concepts like the Constitution, common sense, or even simply doing what is right, there is a scenario under which I could come to support these tax weapons - Charlie Rangel's characterization, not mine: "We had very few weapons and the only ones that we had that made sense . . . was the [tax] code," - being unleashed against the employees of AIG.

Since the crime of these people seems to be that they received contractually promised compensation in exchange for contractually defined performance while working for an institution that spent far more than it earned, effectively if not legally defrauded the United States taxpayers out of billions of dollars, and generally mismanaged their business to a degree that would be nearly impossible to imagine if it wasn't already presented as fact, Congress should first apply that standard to themselves and their own performance. Once congress passes a 95% tax rate (or 90% - I can be charitable and compassionate as well) on all compensation earned by a Congressman and a Senator, as well as all of their staff, I will gladly step aside and let them have their way with AIG.