US Lawmakers vote in 90% Tax levy on bonuses
Discussion
el stovey said:
Fittster said:
Companies should be able to pay their employees however much they please. They should be able to go broke too.
That’s how capitalism is supposed to work.
They shouldn't be able to go broke and then pay their employees however much they please though.That’s how capitalism is supposed to work.
Edited by telecat on Friday 20th March 08:28
RobDickinson said:
Fittster said:
RobDickinson said:
Fittster said:
Companies should be able to pay their employees however much they please. They should be able to go broke too.
That’s how capitalism is supposed to work.
AFIK the US government is the major shareholder in these companies now isnt it? Shouldnt it be down to them who gets paid what.That’s how capitalism is supposed to work.
Prehaps they should take some of these $trillions and pay someone with a decent legal and financial mind to sort it all out...
They cannot, but what they can and should, but won't, do is enforce basic standards of honest practice, and not throw taxpayers money recklessly at bust companies. They should strictly protect the national interest - bailing out banks and insurance companies does not achieve that and this becomes more obvious with every passing day.
I favour ruthless action, and if that involves taxation, fine. Because pussyfooting around with these people and their lawyers is going to achieve nothing but play into their hands. The Governments of the USA and UK will get ripped off in just the same way as investors.
i wonder if politicians on both sides of the atlantic will vote so that they lose 90% of their 'bonuses' if the man in the street decides he has been let down by a bunch of self important pr**ks who are funded out of the public purse.
no, didn't think so.
even at $250k there will be people there that have had no direct effect on the policies and done a damn good job and they now have been lumped in with the rest. I appreciate what they are trying to do and why, but there will be people who deserve these bonuses, and in fact count on them to make up their packages.
no, didn't think so.
even at $250k there will be people there that have had no direct effect on the policies and done a damn good job and they now have been lumped in with the rest. I appreciate what they are trying to do and why, but there will be people who deserve these bonuses, and in fact count on them to make up their packages.
cardigankid said:
The fact that the government failed to stop irresponsible practice doesn't make it right. What happened was not capitalism, it was a perversion of capitalism, and those involved deserve anything they get. Equally all those who invested were hoodwinked, just like suckers at a fairground - it is up to them to learn their lesson. Who seriously thinks a load of politicians can dictate what happens in the capital markets?
Why should businesses be prevented from taking irresponsible actions? Why should the government protect investors from themselves? Capitalism was fine until the government decided to save the business and investors. Let them be wiped out and everything would have returned to normal. Government invention in Japan has lead to 15 years worth of misery.el stovey said:
Fittster said:
Let them be wiped out and everything would have returned to normal. Government invention in Japan has lead to 15 years worth of misery.
Without government intervention there would be a complete collapse of the banking industry.I'm not sure that I believe that, personally, but we can't end up in a position where banks can do whatever they want to reap the benefits when times are good and then be guaranteed a bailout when things go bad. I don't think heavily regulated capitalism works - we (we being the capitalist world, not the UK) either need a completely free market or government owned banks. The current system seems to be the worst of both worlds.
IMHO.
Edited by kambites on Friday 20th March 08:47
el stovey said:
Fittster said:
Let them be wiped out and everything would have returned to normal. Government invention in Japan has lead to 15 years worth of misery.
Without government intervention there would be a complete collapse of the banking industry.Fittster said:
el stovey said:
Fittster said:
Let them be wiped out and everything would have returned to normal. Government invention in Japan has lead to 15 years worth of misery.
Without government intervention there would be a complete collapse of the banking industry.Edited by just me on Friday 20th March 09:04
Jasandjules said:
Retrospective legislation is never a good thing in a just society.
Completely agree. It stifles any capitalist intentions as there is no advantage to doing anything - why bother trying hard when the government comes later and taxes the lot....Not a good idea. I understand why this has happened, but I hoped the Senate was smarter than this and could see through the knee-jerk reaction like this.
AJS- said:
RobDickinson said:
AFIK the US government is the major shareholder in these companies now isnt it? Shouldnt it be down to them who gets paid what.
Then why not do it through their shareholder channels, rather than passing legislation?It is of course sheer populism and populism and the sort of rational economic policies needed to get us out of the recession don't mix. Remember the great depression only became so due to misguided (often populist) policies taken by governments.
Must admit I wouldnt shed too many tears to see the banking industry fail and new companies start up and take up the slack.
The notion that if our current banking chappies all died that everything would stop and nobody would be able to lend or generate money doesnt wash with me , sorry. There has and there always will be people who will happily lend money to others at a certain interest rate. Money begats money, it always has, it always will. Someone will always lend and someone will always need to borrow. Thats how humanity works.
The notion that if our current banking chappies all died that everything would stop and nobody would be able to lend or generate money doesnt wash with me , sorry. There has and there always will be people who will happily lend money to others at a certain interest rate. Money begats money, it always has, it always will. Someone will always lend and someone will always need to borrow. Thats how humanity works.
AJS- said:
Arbitary retrospective law making to attempt to minimise the inept way subsidies were handed out to private firms in the first place? Great.
It's not a start, it's another step on the road to ruin.
Hear hear! This is nonsense. Another tax imposed by the "court of public opinion" to appease the rabble who don't understand how the world works. It's not a start, it's another step on the road to ruin.
One needs to discriminate. Some people (think Fred Goodwin here) do not deserve their bonuses. Others who may, for example, have driven exceptional results in their own area in a company that is doing really badly may well deserve their bonus. It is these people who will get hit by the tax undeservedly. Moreover, bonuses are frequently discretionary for more junior staff and the "court of public opinion" now means that bonuses are not popular with the public (yeah right) and they must be removed.
Fittster said:
cardigankid said:
The fact that the government failed to stop irresponsible practice doesn't make it right. What happened was not capitalism, it was a perversion of capitalism, and those involved deserve anything they get. Equally all those who invested were hoodwinked, just like suckers at a fairground - it is up to them to learn their lesson. Who seriously thinks a load of politicians can dictate what happens in the capital markets?
Why should businesses be prevented from taking irresponsible actions? Why should the government protect investors from themselves? Capitalism was fine until the government decided to save the business and investors. Let them be wiped out and everything would have returned to normal. Government invention in Japan has lead to 15 years worth of misery.contango said:
They have rushed in legislation to calm the public over the AIG bonuses (amongst others)
Michael Lewis, (Liars Poker author) has a good take on the situation.
http://www.bloomberg.com/apps/news?pid=20601039&am...
Good articleMichael Lewis, (Liars Poker author) has a good take on the situation.
http://www.bloomberg.com/apps/news?pid=20601039&am...
Very good article. If Goldman Sachs would not have been affected by the collapse of AIG (because it was hedged against it), why bail it out to the tune of 13 billion?
Why bail out others who bet wrong? It flies completely in the face of free market capitalism. Those who bet wrong should go out of business and be replaced by those who who are smart enough not to bet wrong.
Why bail out others who bet wrong? It flies completely in the face of free market capitalism. Those who bet wrong should go out of business and be replaced by those who who are smart enough not to bet wrong.
Edited by just me on Friday 20th March 22:29
According to Blodget the limit is 250k household income/125k individual.
He's not a supporter: http://www.huffingtonpost.com/henry-blodget/90-bon...
He's not a supporter: http://www.huffingtonpost.com/henry-blodget/90-bon...
Gosh, where to start. There are so many views in this thread that I agree and disagree with.
The US government helped to fuel this problem by forcing sub prime lending.
The banks got greedy.
Law making after the event - smacks of communism!
I don't know the ins and outs but I would expect the bonuses being paid are all contractual and can't be avoided. Why would any company going under pay bonuses to employees if they don't have to!
Whilst I can can see the point of view from those who say the banking system should be allowed to fail I am not sure I would like to be living through this. Yes they are businesses but unfortunately they are businesses that we all deal with through savings, investments, mortgages, insurance, etc. etc. I would not like to lose my savings and investments but still have to pay my mortgage. I prefer the bailout option and hopefully the banks will recover and pay the tax payer back. Yes it may be some time but a better option all round from my view point.
The US government helped to fuel this problem by forcing sub prime lending.
The banks got greedy.
Law making after the event - smacks of communism!
I don't know the ins and outs but I would expect the bonuses being paid are all contractual and can't be avoided. Why would any company going under pay bonuses to employees if they don't have to!
Whilst I can can see the point of view from those who say the banking system should be allowed to fail I am not sure I would like to be living through this. Yes they are businesses but unfortunately they are businesses that we all deal with through savings, investments, mortgages, insurance, etc. etc. I would not like to lose my savings and investments but still have to pay my mortgage. I prefer the bailout option and hopefully the banks will recover and pay the tax payer back. Yes it may be some time but a better option all round from my view point.
Soft Top said:
Law making after the event - smacks of communism!
Trouble is that they've brought it on themselves. Instead of seeing that the public would be seething - which they are - and implementing a strategy, eg the bonuses get paid into a trust which pays out in the future when the Govt has been paid back, they have all gone down the route of demanding what is owed to them.A solution not to their liking has now been hoisted on them. What DID they expect?
The average US taxpayer is not concerned about an individual's contract, or how well they've done, or what they are owed, they see the $170bn THEY put into the company, they are seeing their own situation deteriate, and then they are seeing some very large bonuses being awarded, and to rub salt into the wounds - they see their pensions have been absolutely decimated in a single year.
It's really not difficult to see why the US taxpayer is very very upset right now.
The majority of the $165m in bonuses that AIG are paying out are for the UK based investment bankers (the ones largely responsible for getting AIG into hock with these Credit Default Swaps and so on). So 90-100% tax on bonuses in the U.S. isn't going to help them; it will be *interesting* to see if Brown and Co. roll-over for the Americans as usual or decide to grow a pair...
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