WASHINGTON - Congress finally has come up with a politically popular tax plan: a near-total tax on the $165 million in bonuses AIG says it must pay executives of its division blamed for its nearly $100 billion loss last year.
The idea of using taxes to recoup those payments and another $450 million in bonuses over the next two years spread like wildfire among Democrats Tuesday as taxpayer anger turned up the heat on the federal government, which has sunk $170 billion into AIG to keep it from falling into bankruptcy.
"If we can't kill the big bonuses, we'll tax the big bonuses," said Rep. Steve Israel (D-Huntington) as he introduced a bill late Monday for a 100 percent tax on bonuses over $100,000 at federally bailed out firms.
I think this is definitely a creative workaround to the already signed contracts that these employees had for bonuses. While it's a little worrisome to see the government taking 100% of people's bonuses, I think in this particular case it may be well warranted.
What do you think of the idea? Does this go too far, or does it maybe not go far enough?