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February 01, 2009

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mel

Those bonuses, if stifled, might not make it to the "proper" campaign chests. It's not like there are any creative finance companies based in Connecticut or anything. Just another example of politicos deciding that "you make too much money, pay up."

kim

Now, we know he smokes cigarettes, but stoop to demagoguery? C'mon, this is not helping America.
=====================================

Vinman

What's most important is that we Americans understand that our elected leadership is working really, really hard--sometimes with their sleeves rolled up!-- to do the right thing.

mel

bad-

retroactive estate tax case in summation:

"…about a retroactive estate tax rate…we mentioned Nationsbank above. It was an
interesting case, and had to do with the short-lived 50% top estate tax rate in 1993. Here’s the
upshot: the top estate tax rate used to be 70%. In 1981, the law changed, and the rate started
dropping: it was supposed to hit 50% within four years. When the rate reached 55% in 1984,
however, Congress froze it. It kept postponing the 50% rate with “extenders bills.” In December
1992, Congress was late in sending the extender bill to then-President Bush, who killed it with a
pocket veto. 1993 thus dawned with the long-awaited 50% rate. But when President Clinton
signed OBRA (the Omnibus Budget Reconciliation Act) on August 10, 1993, the 55% rate was
permanently reinstated, retroactive to the beginning of 1993. The 50% top rate was history.
Which brings us to Ellen Garwood. She died in March 1993 with a $28 million estate. Her
estate, which filed its return nine months later, paid taxes at the 55% rate and filed for a $1.3
million refund – or the difference between the 55% and 50% rate. Ellen’s estate made various
constitutional arguments against the higher rate, in essence saying that it wasn’t fair to tax her
estate at the 55% rate, since she had died when the 50% rate was in place. Her estate lost on
all counts, both in the Federal Claims Court and its Court of Appeals. One of the most
interesting points the courts made was that the retroactive application of the 55% rate promoted
tax equity. Why? Because but for the retroactivity, a handful of taxpayers like Ellen – who died
during that 8-month period of the 50% rate – would have been better off than the taxpayers who
were subject to the 55% rate during the 9 years prior to OBRA, and the years following it."

I grabbed that clip from here(LUN, .pdf) The gist of the case that ran it all the way to the SCOTUS was that a person could not "arrange their affairs" properly, if Congress was constantly moving the goalposts. Considerable precedent apparently, but not enough for that court, who found for the Federales. I don't think the one I cited was the one that ran all the way, but I'll "LUN" it later, when I've got more time to search.

jimmyk

As I've said in other recent threads, in most cases these so-called bonuses really represent the bulk of compensation, and were down 44%. Huge pay cuts, more than we can say for the UAW, Congress, and other incompetents.

centralcal

Sometimes a commenter just nails it in a hysterically funny way.

Over at Althouse discussing Daschle, commenter DaveG said this: 1040dem

Ranger

Yes, the 1040DEM:

Line 1: Are you a Democrat?

Line 2: How much income to you want to declare for this year?

Line 3: How much tax do you feel like paying on that income?

Old Lurker

To pay for the downer (yes I know I do that) I posted for Narcisco at 9:52 on the Saturday thread, I offer up the LUN. Enjoy!

Foo Bar

I certainly agree that the question of why Bob Rubin and the top crew at CitiGroup are getting bonuses is a legitimate topic of discussion

???

Rubin and other top Citi execs are not taking bonuses for 2008.

Rubin actually has declined a bonus in each of the last two years.

Extraneus

Officials are concerned that harsh limits could discourage some firms from asking for aid.

And we certainly can't have that. How could we take them over otherwise?

Fatnugly

Sunshine Obama is hiring his Harvard pals for jobs that never existed. Agencies do these jobs. He's hiring 100,000 of feds for jobs that they didn't do on 9/11. Congress is limiting executive salaries when they have no term limits, trade their seats for family members and Harvard pals, gave away 100s of billions in foreign aid outside the normal US government on a five year entitlement and have sworn no pay raises after they gave themselves one. Dems are breaching their trust for government and applying rules that never applied to them to corporations.

The government needs to apply corporate laws to the US government. No hiring family or friends. No giving away billions outside the us government budget.

kim

Poor, poor, unemolumented Rubin.
================================

narciso

Pobrecito, as I they would say in my neck of the woods. He sold junk to all corners of the world, it's a wonder he's not in jail, then again Madoff's not in jail either. Yeah I needed that OL, although I don't know what that is exactly.

Faglyfugly

The ONE HOBO is right. He had to sue over loan criteria to make everything free, I mean equal, for everyone and the banks were predatory treating everyone free, I mean equal, because it's legally law. So, the bailout was needed because we do this for CHA housing because they're poor and not treated fairly and the CHA mortgages and the other ones that were treated like junk, I mean like equal, had to be bailed out to because mortages are free, I mean equal, for everyone. So, The ONE HOBO was right to say the US government guarantees the mortgages just before China bought the junk, I mean equal mortgages, from Merrill because that's what we have to do for the poor, I mean equal mortgages.

The executives are getting rich off our poor mortgages selling them overseas for a US government bailout and they should be stopped by socializing banking and mortgages like China. Since they're already sold to socialized banking overseas, we should just follow the model there and bailout the holders of the mortgages since it's trillions and enough to buy them all their houses and pay off the foreign owners, making it all American.

The HOBO's socialization should make sense, we even paid off the socialized countries overseas. He didn't plan that, it's just 'cause he took care of that poor CHA mortgage holder like the commie, I mean community, activist he is; corporate America took advantage of him too, selling to China.

We all need to go back to school and get real smart like Obama and he'll even pay for a semester because the wage he pays you won't. It's not like it's a Harvard re education.

Ranger

Well, first, lets understand why the bonuses are so large. First, thanks to Bill Clinton and the Dems in congress, no company can deduct salary above $1M as a business exspence. Therefore, Rubin was paid exactly $1M. For Citi to pay him more than that, is must structure the payment outside of salary.

Now, if Rubin had taken his $8M bonus for 2008 after helping to run the company into the ground, he probably would have been hunted down and killed by angry shareholders.

Rubin still kept his $1M check for the service of helping destory CITI (just like Rahm Emmanuel kept his $250K check for sitting by and letting the management destroy Freddie Mac).

And, as I recall, just a few weeks ago the NY state comproller was whining that the state would need a huge bail out from the Feds because Bonuses would be way down and wall street, and that was going to cost the state over $200M.

clarice

Ranger I love your riff on 1040Dem and blogged it though I've no idea when or if it'll run.

Danube of Thought

Let no one ever forget that Bob Rubin (the "greatest Treasury Secretary since Hamilton") was the number one cheerleader in the fight against regulating derivatives.

Rick Ballard

"But I have little doubt that somewhere in Citigroup there lurks a foreign-exchange trader who was utterly divorced from the decision making behind the mortgage melt-down, was very profitable, earned a large bonus, and could find employment at a bonus-paying hedge fund in a matter of hours."

So what? Zombiegroup has earned a death sentence due to the total abandonment of fiduciary responsibility by its board (who should be sued into personal bankruptcy - director's insurance notwithstanding). The Feds are filling the beggar's cup, they can have the beggar dance as they wish.

No one held a gun to Lehman or any of the other members of the Credentialed Moron Society (Northeastern Branch) and forced them to destroy the trust of investors, depositors and the general public. It was a voluntary action, taken with extraordinary overconfidence in a mass of relatively "new" financial instruments whose primary purpose was to generate income for the ever so select group of Credentialed Morons who devised them. The instruments were pitched and sold on their secondary purpose - belt and suspenders against the fact that collecting the data necessary to make good loans is just so darned boring and slow that it's difficult to keep a Credentialed Moron on task from 9AM to tee time.

Which of those marvelous hedge funds is hiring forex folks at a stunning clip today? My understanding is that a great many of the hedge funds are somewhat smaller today (and will be even smaller tomorrow) than they were 2-3 years ago. They seem to be spending most of their time working to bar 'qualified' investors from access to the money which the investors inadvertently left in their care.

There is nothing left to save on Wall Street. There is nothing that is done on Wall Street that cannot be done in Dallas or Omaha by people with a better understanding of fiduciary responsibility than that exhibited by those wonderful Wall Street folks, so lacking in brains that they took a tea spoon to a sit down dinner with the devil.

Ranger

Ranger I love your riff on 1040Dem and blogged it though I've no idea when or if it'll run.

Posted by: clarice | February 01, 2009 at 11:37 AM

Glad you like it. I think the RNC should make a very nice mock up of the IRS booklet (just a fold over) that explains the new tax law realities (if you are a rich and powerful democrat, you only pay the taxes you want to) and include a very nicely done up 1040DEM with a pre-addressed envelope for the White House. Then mail them all out right around April 1st to every registered voter, just when the average American is tearing their hair out trying to file their taxes.

clarice

Brilliant idea..why not send it in to the RNC,Ranger..
From the responses in the WaPo comment section my instinct that this is a very sore spot with voters, seems to be on target--except of course for the highly nuanced voters who swear by the HuffPo (and can't apparently tell shit from shinola).

MarkO

Hey. The One won.

We're living happily ever after.

JM Hanes

Ranger: Sounds like a good place for Daddy's comparison too.

Republicans:
The Stevens Rebate on $245,000 unreported income = 7 felonies

Democrats:
The Geithner on $48,000 unpaid liability = Secretary of the Treasury
The Daschle on $330,000 unreported income = Secretary of HHS and Healthcare Czar

Porchlight

Line 1: Are you a Democrat?

Line 2: How much income to you want to declare for this year?

Line 3: How much tax do you feel like paying on that income?


Don't forget:

Line 4: When do you think you might get around to making that payment?

MayBee

It should be a sore spot with voters.
In CA, I'm not getting a refund on my overpaid taxes for a while.
Tom Daschle may consider $100,000 not a big deal when he doesn't pay it, but my refund isn't even 10% of that and I still consider it real money. That I'm not getting.

Pagar

Line 1, I wouldn't admit to it even if it would save me money on taxes. I don't understand how anyone can be proud of being one.

glasater

From Rick B's article on the previous thread:

IRS spokeswoman Robin Sabin of Houston suggests Schedule C for the small-business owner and the 1040 line “other income” for the free-lancer. She said this stuff just doesn’t show up on a W2 form.
“You should report your ill-gotten gains just like you report any legal income,” said Sabin.
She said a business name would be fine and that taxpayers needn’t spell out their illegal activity.
“It’s not that we don’t care,” she said. “We want to be able to identify the source.”

Is this not just incredible?

Thomas Esmond Knox

Clawback for losing quarterbacks.

Even better, for losing teams.

What a dumb idea.

patch

If the Feds stop Wall Street bonuses; New York State can kiss their budget bye-bye. Why hasn't Senator Schmuck Schumer spoken in defense of these bonuses?

Oh? Screw Governor David Paterson...

SlimGuy

GIULIANI: I remember when I was mayor, one of the ways in which you determined New York City’s budget, tax revenues, was Wall Street bonuses. Wall Street had a billion, two billion in bonuses, city had a deficit. Wall Street had 15 to 20 billion, New York City had a 2, 3 billion surplus. And it’s because that money gets spent. … It does have a reverse effect on the economy, if you somehow take that bonus out of the economy. It really will create unemployment. It means less spending in restaurants, less spending in department stores. So everything has an impact.

SlimGuy

WASHINGTON (CNN)—One day after President Barack Obama ripped Wall Street executives for their “shameful” decision to hand out $18 billion in bonuses in 2008, Congress may finally have had enough. An angry U.S. senator introduced legislation Friday to cap compensation for employees of any company that accepts federal bailout money. Under the terms of a bill introduced by Sen. Claire McCaskill, D-Missouri, no employee would be allowed to make more than the president of the United States. Obama’s current annual salary is $400,000.

Old Lurker

"...no employee would be allowed..."

And there you have it. Remember this moment when you tell your grandkids about these times, and what went before.

Amused bystander

Old Lurker: Did they plan this from the beginning. contrive a crisis, let them take the money, and now hit them with caps?

It is beyond belief that the government will tell us this. Boy this is really going to help end the recession. Are they going to limit dividends too? Money and talent will just head out the door. Firms too.

And we have to be below or equal too the president in income too. When will people have enough of this? I can scarcely believe it is happening

Or do they expect now that firms will turn it down and then they can use the money for something else?

These people just detest freedom of an sort. They detest life itself. What a mess we are in.

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