It looks like they’re going to try to tax away the bonuses received by those AIG managers and others who work for companies that have accepted bailout money.
Don’t get me wrong, I am not happy about those huge bonuses. Those people make more money in a year than I will probably see in my lifetime, and I doubt that level of compensation is justifiable for what they actually do.
But a deal is a deal. Those contracts were signed in good faith by AIG and their employees before the bailout and before the government got involved. No matter how you slice it, a deal is a deal.
For the government to come in and nullify a contract is clearly illegal. If contracts are no good, we have no basis for doing any sort of business.
Punitive taxes on those who weren’t doing anything illegal or wrong at the time those contracts were signed is wrong, too, in my view. Because, who will the government go after next? There has to be some limit on who and how the government can levy taxes against. This particular case seems to have aspects of a vendetta – or a witch hunt.
I can certainly understand making huge bonuses illegal on future business that takes a bailout; and even requiring that such a law override preexisting contracts; – but doing it retroactively stinks.