alki_2008
somewhere, someone is very responsible.
….. I completely agree. It would be better to see the legislators pursuing the real culprits (some named in my post #76), rather than spending time writing up bills and amendments that won’t have any effect on THOSE culprits. It’s as though SOMEONE has to take the heat, so the current employees are thrown to the wolves because it’s easier than going after the real culprits or admitting that enough time wasn’t spent evaluating the bailout agreements in the first place (good job, Dodd). I’ve never been a fan of scapegoating.
The financial wizards who straighten out this mess will be seen as rainmakers in this economic climate… they wouldn’t be tarred with the AIG brush
….. In terms of future employment, I’m sure some employers will actually inquire about a financial applicant’s role at AIG…but the death threats, bus tour, and public outrage aren’t as discerning. Unfortunately, there are many folks voicing the same violent comments as Walfredo across a multitude of websites. Lately, the comments are along the lines of how AIG employees should be treated like Somali pirates (ie, sniped by Navy Seals). None of these threats distinguish between the AIG employees that caused the problems vs the AIG employees that come in to deal with the mess afterwards. I can understand why folks would be reluctant to work there, especially those with families. AIG employees whose homes were ‘featured’ on the bus tour hired 24/7 security around that time…and some even had security guards escort their kids to school. It would really suck if society condoned condemning kids for the unproven guilt of their parents (I say “unproven” because some parents were not directly involved in the actions that brought the company down).
$250,000 ADJ gross income is an amount beyond the wildest dreams of most Americans… and those who make that kind of income have the expertise available to them to limit their tax liability
….. Once again, there would be plenty of folks (besides my one example in post #46) that would have an AGI over $250k for the only time in their entire lives. That’s why I think the legislation would’ve seemed saner if it was based on the employee’s base salary or otherwise targeted people that regularly made over $250k…not just in 2009. There are dozens of retention employees in your own “community” that would be affected by any of the tax regulations that have been proposed. Many of them never bothered trying to find loopholes or other methods of reducing their tax liability before, because they never had a high enough AGI to make it worthwhile.
For those that ARE adept at “financial planning”, then it’s hard to plan for tax laws when you don’t know what those laws are going to be. Someone that sold their house in January (and felt lucky about that) would probably regret the sale when, later in the year, a law is passed that makes it a liability that they sold their house in 2009 instead of waiting until 2010. Planning implies that the rules of the game are known ahead of time.
It’s not as though ‘average’ folks were the only victims of the economic meltdown. Financial employees also lost a lot of value in their 401k’s, and the bonuses they received in prior years was whittled down to pennies. I was talking to someone earlier this week whose bonuses over 3 years at a financial company was now only worth enough to get one coffee at Starbucks (bonuses, in the form of stock grants, were ‘captive’ due to vesting rules).
you sell and buy the same asset on the same day and you can take the loss that year… you lose nothing in assets.. but you gain a great deal in taxes….
….. Uhm…what? If you’re talking about stocks, then you can only use those capital losses to off-set capital gains…if there are no gains that year, then the losses can be used to reduce income by no more than $3k/yr. It’s not THAT lucrative of a tax savings. Also, you’d have to avoid re-buying the same stock within 30 days…in which case, ‘wash sale’ rules would apply and the loss couldn’t be realized at all.
Do I think financial executives were overpaid? For the most part, yes – but I know that’s not going to change until the entire industry adjusts the pay scales…if there’s one company that’s willing to pay millions, then the other companies will have to offer outrageous salaries to compete for the good candidates. It’s like professional athletics…players are going to sign with the team that offers them the highest contract.
Do I think the retention contracts were wrong? Retention contracts had a legitimate purpose and were necessary to keep qualified employees, but some of them were probably more lucrative than they had to be. At this point, it’s water under the bridge. I’m confident that any future bailouts will consider the bonus issue, so at least there’s something good out of it.
Do I think the retention contracts should be “essentially negated” by special taxes? No! The contracts were made and negating those contracts (no matter what they contained) is not the way to remedy the situation. Honestly, the AIG bonuses were less than 1% of the $150 billion dollars that taxpayers invested in AIG. I’d rather people get angry at the legislators that removed the provisions from the bailout bill that would’ve prevented bailout funds from being used for bonuses in the first place.