Congress Wants to Tax AIG’s Bonuses
Several members of Congress are planning on taxing away the bonuses that AIG has awarded several of its top executives.
Really this is mostly ridiculous. They have contracts in place that say they owe these employees money. They have to give it to them. Yes these contracts would have been ripped to shreds if AIG had gone bankrupt, but luckily the geniuses that run our government thought it was a good idea to give them over 170 billion dollars and counting so that they could survive. Since they survived, the contracts are valid and should be paid.
The shame is that this is just a political game to distract people from how badly the government handled the whole situation. Who really cares about 160 million when you gave them 170 BILLION. It is a whopping .09% of the bailout money. Sure, it sucks that we are paying these bonuses, but it should not be the issue we are focusing on.
Really, the only problem here is that these big financial companies suck at writing contracts. Why do they have “bonuses” that are guaranteed? I can tell you with certainty that I won’t get a bonus this year if our company loses billions of dollars. Now, I don’t work at a company that has any chance of losing billions of dollars, we would all be out out on the street way before that point. The point is that the bonus only happens when the company is doing well and making money.
That is what is so confusing to me. These banks and big businesses that are losing money are still paying dividends and giving out bonuses. How does that make any sense. Dividends are a sharing of the profits among the shareholders of a company. It seems logical to me that these would only occur when there are, you know, profits.
The same goes for bonuses. A bonus is something you give an employee for a job well done. When the company is losing billions of dollars each quarter, these executives are not doing a good job. Running the entire financial system of the world into the ground does not constitute job well done. So why in the world would the write contracts that give guaranteed bonuses? If that is the case, just put the money into their salaries. There is no reason to call it a bonus.
While I think the bonuses are stupid on the part of these companies, it is really only a drop in the bucket compared to the rest of the mess that is these bailouts.
What do you think about the bonuses? What do you think about the political circus around them? Should we be focusing on getting this money back in taxes, or is this just a political game to distract people from how poorly Washington has handled the bailouts? Let me know what you think in the comments below.