This Time It's Personal

A couple of days ago Sara asked me if I was going to write about AIG, the giant, multiple bailout-fund-receiving insurance company. I said I wouldn't, in part because I'm so sick of hearing about it, but also because I'm sick of writing about the "bailout".

However...

Yesterday, the House of (not so representative) Representatives passed a bill that, on the surface, was aimed at recovering most of the retention bonus money paid to AIG personnel. I was not comfortable with this from the moment I heard about it. I think the first, and natural, reaction to AIG bonuses is for people to feel violated in some way - since taxpayers are funding the bailout and it can be argued that the bonuses were paid with bailout money.

However...

It is not like that bonus money was awarded arbitrarily to the big wigs or given without merit. The money was given to people like you and me as part of their compensation arrangement. It is no different than another business that has to dip into a line of credit in order to meet payroll. The bailout funds are a loan to the recipients. Our government extended that loan. You and I only agreed to it to the extent that we participated in the election process that now allows the clowns to run the circus. If we're going to be mad at somebody, it should be our elected officials -not AIG - and definitely NOT the employees of AIG.

How can I say such a thing? Now, as more details are surfacing, I have discovered that I, too, would be effected by the AIG legislation. The bill stipulates that bonus recipients from any company that received more than $5 billion in bailout money will have to pay a 90% tax. Without going into detail, this legislation would directly penalize me.* I'm just an average worker toiling in the trenches. I am part of the 95% of Americans that were promised no increase in taxes. The bill isn't targeted at some small, elite group of greedy corporate scumbags, as we are being led to believe. The bill effects real people. A lot of real people. It effects your neighbors, your friends, your relatives, and your favorite blogger. 

Think about it - a 90% tax on anything. $19 for two $5 Footlongs at Subway. Ten cents on the dollar is what you get to keep. Work ten years, get paid for one. How is that going to help the economy recover - taking more money out of the wallets of consumers? If you are a tithe-payer as I am, that doesn't leave anything left over to pay bills, feed the family, or buy a hybrid so that I can get President Obama's tax rebate on said automobile. It would be no different than not working at all.

Earn $100, $90 to the government, $10 to the Church = $0 for me

or

Earn $0, $0 to the government, $0 to the Church = $0 for me

I guess it just seems wrong to me that everyone appears to be so much more upset about $200 million (give or take) spent by AIG than they are about the $3 trillion spent by our government. I mean, when the government loaned money to AIG, what did it expect the company to do with it? AIG used some of their $185 billion, $200 million of it, to honor employment agreements. If we're going to start tearing up contracts - and since I won't have any money left after taxes anyway - can I request to have the note on my house shredded as well? (Will that 90% tax revenue be deducted from the total that AIG must one day repay? Or is it in addition to?)

I think the crux of the issue lies in the term "bonus". A bonus is not free, unexpected money, like winning the Power Ball. Bonuses are an important part of an employee's total compensation. Under these rules, An employee that earns $100k in straight salary would not take a hit, but an employee that earns a salary of $50k plus the potential for $50k in bonuses would. The latter would get to keep just $5,000 of his bonus. I would go so far as to argue that "pay for performance" (i.e. bonuses) is in the taxpayer's interest moreso than guaranteed salaries. 

Makes no sense - like a lot of things nowadays.

* I may need to retract this claim at a later time. One source is telling me the House version would only apply to those making more than $250k, which would not include me. However, all of my other sources state otherwise. The jury is still out.

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At least one thing went right this week. The TSA successfully identified a very real threat to our national security and subjected the individual to extra security measures at PDX. Enjoy your flight, Congressman.

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I'm cutting myself off here. I could go on for hours. This is why I didn't want to blog about it in the first place.

One Common Thread

US Trade Representative Nominee Ron Kirk is the latest friend of Obama to be caught trying to cheat the IRS and the citizens of this country. Am I the only person who find this absolutely hilarious? Not to mention disturbing, comical, egregious and, if I were President Obama, embarrassing. Aren't our friends a reflection of our own character? If all of my friends were drug dealers, it would not be entirely unreasonable to assume that I, too, had dabbled in that most dubious of enterprises.

Raising taxes. Cutting taxes. Evading taxes. Every day it's something different from these model citizens. The only constant is that every day we hear something something to do with taxes.

I have serious doubts that these tax issues would have been resolved had the individuals involved not been nominated. Would they have sought out the IRS to set things right? Would they have continued to conceal their theft?

My favorite part of this article is that Kirk has "agreed to make his payments" on his back taxes, in much the same manner one might "agree" to provide for his child or stop for a crossing train.

What's scary is that these stories represent only the corruption we have heard about. I have a feeling that if one were to pull on the right string, the entire fabric would unravel like the sweater from my previous post.

Where There's Smoke...

I've stumbled across the solution to all that ails our country, economically speaking. Here goes:

If President Obama can somehow be allowed to continue nominating candidates for his cabinet indefinitely - ignoring the traditional and theoretical limitations of cabinet size - in so doing he will eventually expose the identities of all U.S. tax cheats. As those individuals settle their debts with the IRS under the pressure of the public eye, Federal coffers will be bolstered and strength once again restored to the American financial system.

In addition to new Treasury Secretary Geithner's previously publicized indiscretions, two more tax-evading public servant nominees surfaced today. 

Former Senate Majority Leader Tom Daschle was to be the new Health and Human Services Secretary. Ironically, he used to serve on the senate's tax-writing committee.

Nancy Killefer was supposed to be the first "performance czar", but will now be dealing with the IRS lien against her house instead.

To Daschle and Killefer's credit, they at least had the good sense to withdraw their names from consideration due to the public embarrassment they've brought upon themselves and their colleagues. That's in stark contrast to the arrogance we've seen recently from Geithner or Portland's admitted pedophile mayor, Sam Adams.

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The official web site of the White House lists 22 Cabinet/Cabinet-level positions. If the same ratio holds true across the entire population, that means 14% of us aren't paying our fair share of taxes. It follows that, speaking generally, for every $100 owed in taxes, only $86 is collected. How many of us would like a 14% raise in salary? How many companies would still be in business or could have avoided massive layoffs had they generated 14% more income?