22 March 2009

Wall Street strikes back - gimmeabreak

In a rather aggressive attempt, CEOs of Citi, Bank of America and JP Morgan have criticised the US congress' attempt to tax bonuses by upto 90%. While I can't comment on the constitutionality of the provision - though some people have opined on it, I find the provisions entirely fair. The proposal is that if a) you have borrowed taxpayer money b) the borrowing is over $5 billion USD c) bonus is granted where the household income of the person exceeds $ 250,000 - then 90% of the income will be taxed. I don't see what is unfair about it, want taxpayer money to distribute as bonus to people who are jointly causes of the demise of the entities? - agree to the terms or return the money. In any case, there is no equity or fairness in any taxing laws, so also I would guess under US laws retrospective tax laws would be constitutional. I don't think it is relevant that the people who caused the mess (assuming way too much) are not the specific ones who are getting the bonus.

See WSJ article

Vikram Pandit memo

Ken Lewis memo

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