Comments on: Legislation Introduced to Tax Bonuses at 90%

By: Kelly

Kelly — Sat, 21 Mar 2009 11:40:03 +0000

The bonuses were paid March 15, 2009, not in 2008.

By: Shawn Fahrer

Shawn Fahrer — Fri, 20 Mar 2009 22:56:23 +0000

If this is the way this law will be written, then there is no way Congress SHOULD have touched the bonuses paid BEFORE THAT DATE (see AIG). A tax law passed in 2009 can’t affect 2008 taxable income, deductions, etc. (otherwise wouldn’t it be an “ex post facto” law, and thus illegal) ?

Whether Dodd, etc. want to admit it, they COULDN’T have stopped the AIG 2008 bonuses in 2009 because of the ex post facto problem. I wish they would have ADMITTED THAT RIGHT AWAY INSTEAD OF TRYING TO B S THEIR WAY OUT OF IT!

By: Kelly

Kelly — Fri, 20 Mar 2009 13:22:12 +0000

But Joe, if they’re doing so well that they could pay their shareholders, why not give the money back if they truly don’t need it? Cause they do need the money and they had an agenda that wouldn’t work without the money.

They were one of the first big banks to take the money. And in October, they were positively gooey over TARP: “We believe the Treasury’s plan is a positive step toward providing much needed capital for financial institutions in the best position to deploy it effectively to stimulate the U.S. economy and strengthen confidence in the U.S. banking system.” – Wells Fargo Chief Financial Officer Howard Atkins

They really did it, not for lending as the Treasury had hoped, but to acquire another failing bank – Wachovia. That whole spectacle was a political snow job, and Wells was very happy to take part. So, I have very little sympathy for them.

By: Joe Kristan

Joe Kristan — Fri, 20 Mar 2009 12:32:24 +0000

Kelly, Wells Fargo didn’t want the TARP money. Paulson forced them to take it. Why shouldn’t they “whine” that the government took money out of their shareholders’ pockets?

By: m fox

m fox — Thu, 19 Mar 2009 17:41:19 +0000

the gov’t did put tremendous pressure on banks to take bailout money

By: Kelly

Kelly — Thu, 19 Mar 2009 17:28:41 +0000

Oh, I agree with you re TARP being a pain… But the thing is, when they were private companies, they were free to do what they wanted. As a shareholder in my own company, I run it the way that I want to. I haven’t asked the government for billions in aid, however.
When we did apply for a line of credit for the business, eons ago, we were required to submit financial statements every quarter with additional info at the end of the year until the loan was paid off. If we had been paying ourselves – and not the bank – I’m sure we would have heard about it from the bank!

By: TaxRascal

TaxRascal — Thu, 19 Mar 2009 16:06:23 +0000

It does sound like taking TARP money is a little less like a mortgage and a little more like taking a loan from the mob (or from in-laws, I guess). I can understand why these banks are behaving the way they do — normally, with a corporation, managers make decisions and then shareholders can decide whether or not they like them by buying or selling the stock. So if Intel wants to invest in a new plant, or Goldman wants to invest in a new currency trading team, they do it, and if shareholders object, they leave.

In the long run, the shareholders who are smart end up with more money
9and more buying power) and the companies that make bad decisions end up with less money (and unhappy shareholders). The government is short-circuiting this process by demanding veto power over decisions it thinks might be unpopular. So now, shareholders and managers have fewer choices.

Fortunately, we at least know what we’re getting into. The government is trying play a major part in running a bunch of large financial companies. They’ve done that before — with Freddie Mac and Fannie Mae.