Dems to offer legislation protecting big chunk of TARP bonuses

They are categorically insane.

Charlie Rangel, the guy who came to AIG’s rescue on Monday, telling other House members not to dare try to tax AIG’s exorbitant bonuses, now has legislation to “fix” the problem, and Speaker Pelosi appears to have endorsed it. I’ll let Speaker Pelosi explain the details of the legislation, lest my head explode:

As a result of extraordinary abuses of the public trust by companies rewarding employees with excessive compensation while receiving billions in taxpayer assistance, Congress introduced legislation to recover taxpayers’ dollars.

• The bill would apply a separate income tax rate of 90 percent to bonuses received by individuals from companies which have received at least $5 billion from TARP. It would also apply to bonuses paid by Fannie Mae and Freddie Mac.

• For this purpose, bonuses will be defined as any retention payment, incentive payment, or other bonus which is in addition to regular employee compensation payable on a periodic basis.

• The special tax rate only would apply to individuals and families with overall income (including income other than bonuses) in excess of $250,000.

• The bill applies to payments received after December 31, 2008.

So let me explain the Pelosi-Rangle bill in simple English.

1. If you get a $4.99 billion bailout from the American taxpayers, give all the bonuses you want.

2. Even if your company falls under this legislation’s restriction on bonuses, if you as an individual make $249,000 a year, you’re exempt and can get all the bonus you want! Would a $10m bonus be too high for the Dems on the Hill? Hell no! $10m is middle class!

3. If you’re a company that got a bailout before January 1 of this year, bonus away!

Are they freaking insane? Why does a company that got a $4.9bn bailout, or even a $2bn bailout, get to hand out $10m bonuses to their top employees? The Democrats don’t think that little story is going to infuriate the American people? And why are you and me paying, in a year in which we’re not even sure if we’re gonna have a job, for anyone’s bonus on Wall Street? Let alone someone making $249,000 a year? Who came up with that brilliant idea?

Oh, and get this. The Dems are suggesting that if you work on Wall Street, you can get a full, unlimited bonus, perhaps in the millions, even if you make $249,000 a year. But if you work on main street, and earn more than $75,000 a year, the Democrats in Congress just passed legislation making sure that you don’t get the full $8,000 first-time homebuyer tax credit, because you’re too “rich.” See, if you make $75,000 a year NOT on Wall Street, you’re “rich” according to the Democrats in Congress. But if you make $249,999 a year on Wall Street, you get a free handout, courtesy of the American people!

Think that’s just a fluke? Think again. The Dems did the same thing with Obama’s stimulus tax rebate. Remember that little $400 tax cut we were all supposed to get? In fact, if you make more than $75,000 a year, they start to take away your tax cut because – let’s all say it together now – YOU’RE RICH!

So to recap: To the Dems in Congress, if you make more than $75,000 a year and work on Main Street, you’re rich and undeserving of federal help. But if you make up to a quarter of a million a year, and work on Wall Street, you’re middle class and the sky’s the limit. And even better, you $75,000 a year people are actually paying for the $249,000 a year people to get their benefits!

These people are categorically insane.


Follow me on Twitter: @aravosis | @americablog | @americabloggay | Facebook | Instagram | Google+ | LinkedIn. John Aravosis is the Executive Editor of AMERICAblog, which he founded in 2004. He has a joint law degree (JD) and masters in Foreign Service from Georgetown; and has worked in the US Senate, World Bank, Children's Defense Fund, the United Nations Development Programme, and as a stringer for the Economist. He is a frequent TV pundit, having appeared on the O'Reilly Factor, Hardball, World News Tonight, Nightline, AM Joy & Reliable Sources, among others. John lives in Washington, DC. .

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