By Charles Desrochers / Asst. Lifestyles Editor
The House of Representatives passed a 90 percent tax on bonuses given to employees of companies receiving more than five billion dollars in government bailouts.
The tax, which was passed by vote of 328 to 93, only applies to employees who made more than $250,000 a year.
The main argument against this tax is that it singles out a small and specific group of people as well as their families.
Alan Johnson, a managing director of the compensations consulting firm Johnson Associates told the New York Times, “it’ll impact tens of thousands or maybe hundreds of thousands of people,” and that, “if you’re a receptionist and your husband is a doctor, your $5,000 bonus just vaporized. It’s not just the C.E.O.’s.”
Now that view may seem fair if this weren’t in reference to a company like AIG who has been financially hemorrhaging, despite being given well over 300 billion dollars. That’s billion, with a B.
To that I say, “you’re still making $250,000!”
The government does have a right to say whether or not these employees deserve these bonuses. The government owns an 80 percent share of AIG, so it’s probably best to think of this tax as the boss’ stamp of approval.
These workers are lucky they get to keep 10 percent of their bonuses; the fact that these traders got to keep any of their bonuses is amazing.
The company’s excuse for handing out $165 million in bonuses was that they were trying to provide incentive to keep the employees that were doing a good job.
So, the same people who lost $61.7 billion in one quarter are the same people that deserve a raise? Even though $165 million is only a drop in the bucket when compared to the money given to them by the federal reserve, it still comes off as irresponsible.
To put $61.7 billion in perspective, AIG has lost 197,124,601 brand new Ferraris.
Edward M. Liddy, Chief Executive of AIG, suggested on March 18 that all employees who have a salary of 100,000 or more should give back half of their bonuses. But even this is ridiculous.
A bonus implies that the employee did their job up to or beyond expectations. If that logic is put into place then what was AIG’s goals for 2008? Did they expect to loose $600 billion? A roaring applause is deserved if they managed to dodge that bullet.
The sad thing is that the government has targeted a specific group of people. It may seem like a good idea now in the wake of the outrage but all it really amounts to is a majority’s decision to discriminate against a few.
The bonuses were handed out without seeking permission from the party signing the checks. It wasn’t AIG’s money to give. And that’s the one redeeming fact about the whole situation. It’s an employer reducing its employees’ bonuses after reassessing their success, a bonus it didn’t know it gave.