Breaking: “Mob Rule” House Passes Un-Constitutional Tax Bill
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Is it time to hit that “re-set” button on the US Constitution yet???
They do THIS to them … and we allow them to do anything to the rest of us in the future … perhaps not so far off future.
House approves 90 percent AIG tax
In a vote that divided Republicans in half, the House narrowly approved a 90 percent tax on bonuses for AIG and other financial firms that received bailout funds last fall, despite a fevered protest from conservatives who tried to fight the tax increase.
Republicans tried to bring the measure down, but their own leadership was divided on the measure. The roll call was 328-93, easily surpassing the two-thirds support needed to expedite passage of the legislation.
Almost all Democrats voted for the measure, but the GOP conference was literally split in half, with conservatives – led by Minority Leader John Boehner – voting against the bill. But dozens of other Republicans, including Republican Whip Eric Cantor (R-Va.) and Reps. Adam Putnam (R-Fla.) and Roy Blunt (R-Mo.), waited until the last minute to vote yes, making a difficult vote in favor of a tax increase.
The measure would impose a 90 percent tax on any bonuses paid to top executives at these firms after revelations that AIG paid its executives $165 million in bonuses this year.
The Senate is operating on a parallel track this week crafting a heavy surtax on virtually all bonuses for employees at companies that received federal bailout funds.
The legislation would affect any financial firm receiving more than $5 billion in federal funds from the Troubled Asset Relief Fund. It would only pertain to employees whose total family income exceeds $250,000 per year, and would cover all bonuses received after Jan. 1, 2009.
Conservative Republicans in the House voted against the legislation because they viewed it as a knee-jerk, potentially unconstitutional response to the AIG furor. They also sought to inflame on ongoing debate between the White House and congressional Democrats over who stripped language from a massive stimulus earlier this year that would prohibit these bonuses from being paid.
Democrats dismissed the GOP criticism, saying voters don’t care about who put what in the stimulus conference report, and would rather just get taxpayer money back.
“No one back home is asking about the conference report,†said Ways and Means Chairman Charlie Rangel (D-N.Y.). “They are asking are these people going to take these bonuses the taxpayers paid for.”
Boehner tried to rally against the bill, but half of his conference had already decided they’d rather take a hit from fiscal conservatives who will criticize a tax increase, rather than face voter wrath over AIG bonuses.
“This political circus that’s going on here today with this bill is not getting to the bottom of the questions of who knew what and when did they know it,” Boehner said.
Rep. Steven C. Latourette, an Ohio Republican on the Financial Services Committee, introduced a resolution of inquiry that would force Treasury Secretary Timothy Geithner to provide all documents, records and communications regarding American International Group (AIG) within 14 days of the bill’s adoption. Under the special rules of the resolution, the House Financial Services Committee has 14 days to act on it. If they don’t, it automatically goes to the House floor for a vote.
“Nobody’s taken ownership,” LaTourette complained. “They’ve promised transparency around here. They didn’t give us time to read the thousand page bill, this is in the bill, they’re all pretending like they’re shocked.â€
Latourette called the AIG tax bill “ridiculous,” arguing before the vote that Democrats were “daring” Republicans to vote against it, “but it’s crap.â€
The House bill would have far more sweeping effect than just taxing away AIG’s controversial bonuses. Since Wall Street pays much of employee salaries in the form of deferred bonuses, the legislation would hit any employee at bailout recipient firms that makes more than $250,000, financial services lobbyists say.
And the $5 billion bar set by the legislation guarantees that all of the biggest recipients of TARP money – some like JP Morgan who say they did so only at the government’s behest – would be subject to the surtax.
That could have dire consequences for the overall stability of the financial system, lobbyists warn, as banks rush to give back their TARP money, funds that were supposed to help spur lending and stabilize the system.
The threshold does mean that smaller community banks would not be hit by the bill.
WASHINGTON – Acting with lightning speed, the Democratic-led House has approved a bill to slap punishing taxes on big employee bonuses from firms bailed out by taxpayers.
The vote was 328-93.
Said House Speaker Nancy Pelosi: “We want our money back and we want our money back now for the taxpayers.”
Republicans called it a legally questionable ploy to paper over Obama administration missteps.
Minority Leader John Boehner, R-Ohio, said the bill was “a political circus” diverting attention from why the administration hadn’t done more to block the bonuses before they were paid.
The bonuses, totaling $165 million, were paid to employees of troubled insurer American International Group, including to traders in the unit that nearly brought about the company’s collapse.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
WASHINGTON (AP)—Democrats pressed for quick action Thursday on a bill to slap punishing taxes on big employee bonuses from firms bailed out by taxpayers. Republicans called it a legally questionable ploy to paper over Obama administration missteps.
“The American people demand protection and that’s what we’re doing today,” said Rep. Charles Rangel, D-N.Y., chairman of the tax-writing House Ways and Means Committee.
But Minority Leader John Boehner, R-Ohio, called the bill “a political circus” diverting attention from why the administration hadn’t done more to block the bonuses before they were paid.
The bonuses, totaling $165 million, were paid to employees of troubled insurer American International Group over the weekend, including to traders in the unit that nearly brought about the company’s collapse.
Democratic leaders rushed the bill to the floor under a procedure that requires a two-thirds majority for passage. The numerous Republican complaints about the measure during Thursday’s debate raised questions on whether it would pass.
“The Democratic bill brought to the floor today is constitutionally questionable,” said Rep. Mike Pence, R-Ind. “It’s obviously a transparent attempt to divert attention away from the truth that Democrats in Congress and this administration made these bonus payments possible.”
The bill would levy a 90 percent tax on bonuses paid to employees with family incomes above $250,000 at companies that have received at least $5 billion in government bailout money.
“We figured that the local and state governments would take care of the other 10 percent,” said Rangel.
Rangel said the bill would apply to mortgage giants Fannie Mae and Freddie Mac, among others, while excluding community banks and other smaller companies that have received less bailout money.
A tax expert said there is plenty of precedent for levying punitive taxes on behavior that lawmakers find objectionable. Robert Willens, a corporate tax lawyer in New York, cited the steep excise taxes levied on money paid to firms to keep them from launching hostile takeover bids, known as “greenmail.”
“You can write very narrowly tailored laws,” Willens said. “And they can do it for bonuses already paid.”
House Democratic leaders unveiled the bill Wednesday as the head of embattled American International Group Inc., which has received $182 billion in bailout money, testified about $165 million in bonuses paid out in the past week to about 400 employees in its Financial Products unit.
Edward Liddy, who was brought in last year by the government to run AIG, told a House subcommittee that the company was contractually obligated to pay the bonuses but that some of the recipients have begun returning all or part of them.
Liddy said that on Tuesday, he had “asked those who have received retention payments in excess of $100,000 or more to return at least half of those payments.” Some have “already stepped forward and returned 100 percent,” he added.
In the Senate, the top two members of the Finance Committee on Tuesday announced a bill that would impose a 35 percent excise tax on the companies paying the bonuses and a 35 percent excise tax on the employees receiving them. The taxes would apply to all companies receiving government bailout money, but they are clearly geared toward AIG.
President Barack Obama, who took office just under two months ago, told reporters Wednesday that his administration was not responsible for a lack of federal supervision of AIG that preceded the company’s demise.
But Obama added, “The buck stops with me.”
(AP)
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