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Here Comes The Banker Bonus Tax: Senators Boxer And Webb Propose 50% Tax On Bonuses Over $400,000
All the posturing that the US would never repeat the UK's "collosal mistake" of levying banker taxes, is about to be unwound. Senate Democrats Barbara Boxer and James Webb have proposed a 50% tax on bonuses of more than $400,000 in all financial firms having received TARP assistance (yes, that includes Goldman). Look for the market to plunge now as Wall Street fires a warning shot against this proposal from ever seeing the light of day.
From Bloomberg:
Boxer of California and Webb of Virginia introduced legislation to put a one-time levy on the bonuses of employees at banks that took at least $5 billion from the Troubled Asset Relief Program, the senators said yesterday at a Washington news conference. The bill would affect 13 firms and could raise $10 billion to help cut the federal deficit, Boxer said.
“It’s outrageous that many of these companies are doling out millions of dollars in bonuses while the rest of America feels the pain of reckless decisions,” said Boxer, who is seeking re-election in November. American International Group Inc., Citigroup Inc., JPMorgan Chase & Co. and Morgan Stanley are among the companies that would be affected, Boxer said.
The Senate last year retreated from a bill approved by the House that would have put a 90 percent tax on bonuses at companies that received more than $5 billion in aid. The House passed the measure after retention pay for AIG employees sparked a public outcry. The U.S. also hasn’t followed a 50 percent tax on banker bonuses introduced in December by U.K. Chancellor of the Exchequer Alistair Darling.
It seems that taking a look at the chart that demonstrates the Treasury's plunging tax withholdings has changed the opinions of some of the Democrats who know all too well where to look for excess cash to fund soon to be quadrillion dollar deficits. Whether all New York bankers will now pick up and go to Hong Kong, just as the great Asian bubble is preparing to turn the lights out on its capital markets, in anticipation of an imminent asset bubble pop, remains to be seen. Nonetheless, we are certain that with vocal opposition to the bonus tax soon to come from such enlightened Wall Street interests as Shelby and Corker, this proposal has marginal probability of passing at best.
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tax that ass
kill this overbloated pig of a market
All the fags on Wall Street need to have the shit taxed out of them.
Let them pay for the failure of two generations and greed unsurpassed never before.
Zero sympathy from this citizen, that is a fact!
Moron.
They aren't paying for anything. They've already front loaded the bonuses to comp for the tax.
To the moderators:
Please crack down on the homophobic and anti-Semitic rants that are starting to pervade Zero Hedge.
Fag is no longer a homophobe hate term. It now refers to loud herds of Harley riders, and other peace-disturbing assholes. To wit:
Mayor: “Why would you write something like that and be proud of it?”
Kyle: “Well, cause we want all those fags to get out of our town.”
Cartman: “Yeah, everyone hates those fags, right?”
Kids: “Yeah!” “You bet!” “I do!” etc.
Mackey: “Now just what the heck is going on here? This is not what we have taught you in this school. Kyle and Stan, you’ve always been tolerant of gay people.”
Stan: “Gay people?”
Kyle: “We aren’t talking about gay people.”
Mackey: “You just admitted to spray-painting that they should get out of town!”
Stan: “But why would we want gay people to get out of town?”
Cartman: “Oh, they think we meant, ‘gay fags.’”
Kyle: “Oh, hey, that’s not very nice, Mayor. Just because a person is gay doesn’t mean he’s a fag.”
Mayor: “What?! You four boys, in my office NOW!”
.....and in Britain it is common to hear one bloke say to another..." mate, let's go outside and blow a fag ". It's a common term for a cigarette.
HAW!!!!! Funny.
It's the same here in Sydney.
Although, if it *didn't* mean a ciggy, *then* secondarily it might mean you wanna walk on the wild side.
But, primarily, yeah, it would be same as what you said.
I just can't help giggling at what would happen if you visited, say, Houston and said that in a crowded bar...
Eh, Houston is fairly tolerant and cosmopolitan.
Now, try it in Dallas, or Abilene, or Tulsa... on second thought, in those cities people would probably mentally insert "away" into their hearing of the otherwise humorous phrase and not think anything of it.
Just because I couldn't help myself from playing with the words; You should have said "Eh, Houston is fairy tolerant and cosmopolitan"
HAHAHAHAHAHA - OK, I appreciated your comment below, but this one was funny!
mmmmm, 2 comments, 2 cosmopolitans. Drink-of-choice in the pink-collar ghetto where I rented for a time (o god a rent-girl!). And my favourite martini was named Faster Pussycat.
My apologies to Houstonites everywhere, especially to our friends who are gay, les, and bi-curious!
Maddie, is it true the Texas blokes have some very, very big guns too? So much larger than life, I'm told...
the term is "have a fag"
You will never combat or supress what you call homophobic or anti-semitic setiments by as you put it "cracking down on them". Banning such comments mearly assauges YOUR setiments; those beliefs and attitudes still exist, and will continue to exist and will continue to influence others, because there is forums where they are not shouted down or banned from. No, it is far more effective to allow them to occur, and then for you (and I) to discredit them with rationality and reason. Suppression is not the answer. That plays into their games. They can and do then argue that the paticular forum that banned them cannot offer a cogent response to their claims. To kill cockroaches, you must first start by turning over the rock and exposing them to the light of day.
Tax that commie bitch instead.
Key word - proposed
Until something crosses the O-man's desk for a signature, its all just political masterbation.
Heh-heh... you said "political".
He also misspelled masturbation.
I thought it was a clever compound phrase.
heh-heh...you said "compound".
Get them greedy bankers!
That money could be used to pay for social programs in California!
There goes all the "talent". Guess they'll have to move on to petty thuggery.
This time it will be different. Everyone in the know, knows it is time to get out before the stock market Necklacing begins (http://en.wikipedia.org/wiki/Necklacing). The PPT may well have its hands fuller than expected with there no longer being liquidity providers.
The mobs (aka, "teabaggers") are fixing to run these morons out of DC so they want to get in front of them and make it look like they're leading the parade.
How quaint.
I just wish we could tax every lawmaker that agreed on legislation that opened the doors for the crooks to lute our Nation and expose our citizens to trillions of dollars of future losses and higher taxes. Let's pass "the peoples law" that limits their pay to $1.00 a year, no better yet, let's just vote them out. All of them.
vote everyone who was on the job for more than 2 terms out.
This is not a life job, you serve your nation for 10 years or so and get out. Everyone!
+10. Let's attack the root of the problem (congress) and not the symptom.
Let's attack both. It's not like we're paying by the pixel to rant here on the internet!
I agree that we need to do something to these lyres that lute from us. String them up, perhaps?
very witty.
Why is taxing this clown show a "colossal mistake" anyway? Besides, doesn't the government basically own Wall St. at this point?
You've got it backwards:
Wall St. owns the GovernMint.
Nobody move, nobody's 401k get hurt...
How about 80%.
100% even better.
Why not tak her plaintiff lawyer husband?
Webb thinks that some populist moves are going to save his ass here in Virginia; what a moron.
They should add a few federal lottos to get some taxes from the other end of the public dole.
Yaay, make them piggies squeal!
Never happen...just posturing to try to help Boxer get re-elected.
A little less cooperation between Washington and Wall Street is a good thing.
Tax the hell out of bankers and the idle rich. What? You afraid of wealth redistribution? The rich have been siphoning up all assets and money for decades selling the working class out. Soon, with no jobs and no hope if the government doesn't take the money back the masses will and it wont be pretty. 50% isn't really enough. I want their kids to work as hard as mine and for them to know what it like to give their time and youth to someone else in order to eat and have shelter. To hell with bankers. To hell with the rich. To hell with those that prop them up to the detriment of all others.
Lighten up, Francis.
I work on a bank hedge desk, I get paid to protect the bank against debt defaults. I grew up very blue collar, my dad was a union pipefitter, started his own business, went bankrupt, family was torn apart. I had to start working at 14 lugging golf bags for the rich at a country club. I carried 150 rounds per summer (2 bags at a time). Twice a day in 100 degree heat. In college, I paid my own way, worked three jobs, graduated with a 3.7 and no debt. I haven't taken a dime from anyone since I was 14, worked like a madman and then went to work at a firm where I put in 100 hr weeks like its nothing and made VP. Careful how you paint people. Some us actually try to earn our $ and protect the shareholder too.
In other words you would be unemployed if it wasn't for the US taxpayer.
As someone with such a noble upbringing I'm surprised you decided to become a piece of shit banker.
While I appreciate your get-up-and-go-ness, there are plenty of folks with the same pedigree who happened to work for firms or in industries that were not "systemically significant" and who just lost their jobs.
Many on Wall Street would not even be taking a paycheck, much less a bonus, if not for the taxpayer backstop and endless aid provided by the Fed and Treasury. In addition, since many of the products and transactions on which they were paid huge bonuses in years' past blew up, these past bonuses were not actually earned. It somehow seems fair to take a bit back from what neither you nor your colleagues would even have if the taxpayer wasn't so easy to abuse.
Yes, I would bitch and moan if I was still on the Street and this happened to me, but life isn't fair for anyone. Why should it be more fair for you?
This will never become law as proposed. Some version might get passed by both chambers but it will get watered down in reconciliation or something will be attached to it that will guarantee a veto.
We know how this game is played folks. It's called hide the sausage and we're catching.
Gotta a better one for you: Require all FDIC guarenteed bonds to be defeased by month end.
Kills two birds with one stone: takes the taxpayer off the hook and stimulates demand for UST.
Agreed. Someone tell all the asshats in congress that the banks have not paid back TARP until all that FDIC debt they issued to recapitalize themselves is accounted for. Leaving tax payers on the hook for hundreds of billions is no way to end this game.
We do something very similar to this in my house.
The game is called Congress and Wall Street. I (playing Congress) hide a bunch of raw steaks in and around all of the furniture and then after my dog (Wall Street) finds it, I try to beat the tar out of him for eating all my steaks.
The crazy thing is, I can never catch him. Must be all that steak that helps him run so fast.
Sorry. I'm not a dog person. I'd just shoot the goddamn dog; Bang! , & be done with the whole problem. Actually a whole lot of Bangs in the real world. Don't we wish it was all that simple?
Banker burgers at the tailgate party on Sunday.
Boxer and Webb are simply ruling class weasels seeking to create "populist" impressions of themselves. I mean can you imagine either one of them slinging hash at some truck stop? Someone needs to showcase what their earnings were last year. Perhaps then we need to find a way to tax them at 50%. When the peoples' time comes for Webb and Boxer, they'll wish all there were to it was paying a tax of this kind, trust me.
And it isn’t as if the money’s being returned to the taxpayers or the shareholders; it’s going to Geithner in the Treasury. It’s all smoke and mirrors; it’s all a ruse. It’s nothing but a one-time stand for the political prostitutes. The last time I looked taxes are funneled into the US Treasury, i.e., the same people who gave the TBTFs the money in the first place. The money for the bailouts was taken from the taxpayers; do we get a refund on April 15? First, these companies should have been allowed to either sink or swim on their own balance sheets. But like any other government shell game, the politicians are able to give their lobbyist friends the money, and, then, go back and criticize their lobbyist friends, making their constituents happy so they can get re-elected. And all the while they're making it a win-win for the Blankfein Class and the Boxer Class. They both come out on this and once again the taxpayers are left holding the empty bag.
Very well stated, my friend! Nothing ever puts these maggots in the way of a good screwing, does it, they simply change sides while you're not looking. One positive effect of this crisis has been that the people are increasingly on to these filth. At one point they will have their moment.
Make it retroactive to prior the housing market crash. I want the former ceo's of Freddie and Fannie to pay big for their bonuses. What was the guys name who left with a $60 million bonus? I have no problem with bankers being paid for their worth, but when they can get bailed out with tax payer dollars, and turn around and lend that money back to the government at 3%. Shit I could show big gains using that scam.
I though I read something about they have legal authority to claw back earnings from people who legitimately cased out of ponzi scheme, say someone who had invested in Madoff but just happened to get out 2 years before he flopped.
So if they can clawback earnings from an innocent person duped but lucky to get out, why not these execs at GSE, Wall Street, subprime mortgage brokers, Mozillo at CWide etc...they knew what they were doing, made big money and either jumped out of the wild car before it went off cliff or got govt to save them.
Clawback, clawback ill-gotten gains.
The little secret "they" don't want you to realize is revealed in what they consided themselves: "talent". It's not work, it's a performance, and a well-trained monkey could do it in exchange for bananas.
Once again the US gov't is missing the point (as have the irresponsible bank sr mgrs) which is that profits should stay on the balance sheet in capital accounts to reserve for past, present, and future losses. ho hum, everybody seems to have forgotten about the bank balance sheets and "toxic assets".
Why should the banks have to do that? Don't they already have the unconstrained backing of the US taxpayer? Would be redundant...
funny...
So policy is now dictated by the market? Don't like proposed legislation (Volker rule, etc) just issue a command to your traders to tank the market. Presto, the proposal never sees the light of day.
That is what they get for taking all that lobbyist money.
Eh? Who cares? 400K bonus on 400k salaries? How much fucking money do you people need? 400k is enough to send 13 people to work for a full year at 30k/yr+ what's that to these folks? another fucking bmw they don't drive? another prosititute? God the decadence... you wonder why this country is failing? too many people with too little and too few with more shit than they need.
First of all, he or she is likely as smart as all 13 of your 30k nimrods put together.
Second, buying a BMW supplies many jobs at the BMW factory.
Third, the hooker goes out and buys all sorts of unnecessary shit at high end retailers providing even more jobs.
You're just pissed it's not your money.
more hypocrisy from Ms. Boxer. She made a lot of noise about Bernanke's re-confirmtion and finally voted with the herd. Vote the liars out !!!
Pretty soon all countries will have their own specified advantages....
Switzerland....All things financial
China .....All manufacturing
US.....Football (cannot export this)....movies
Brazil....Commodities
India....All computer programs....
All the rest ....Watch TV
We could easily export football. But I don't see ANY buyers for it, and I'm not sure I'd list it as an advantage.
And a lot of our best movies are filmed in Canada or the UK...
We still have a lot of natural resources. If only we lost 90% of our population we'd be in a similar situation to Canada and Australia.
There are no global buyers for american football, but as a domestic industry, it does well enough. And who cares where the movies are filmed?? US movies filmed in my basement would still be better than movies made in France!
I agree with your plan that we need to get rid of all these damn worthless people, though. ;)
As if the recipients didn't plan on this tax and doubled their bonus to 'gross it up'.
This baby has legs---think the banks would rather take this one time hit on their comp deduction write off and a hit on their employees or a permanent bank tax? No brainer--
"I will destroy any man who tries to take what i got......."?
Before proposed tax....
Banker's bonus $2 000 000
Banker take home $2 000 000
government takes $0
Bank customer is charged $3 for each ATM transaction
After proposed tax is applied
Banker bonus $4 000 000
Banker takes home $ 2 000 000
government takes $ 2 000 000
Bank customer is now charged $6 for each ATM transaction
Guess who got fucked (hint: it wasn't the Bankers)
Sen. Boxer wouldn't let that happen. She will take the money from those greedy bankers and give it to the people. She will make sure that it is the banks who pay, not the people.
I want a ride on the rainbow-farting unicorn that you flew in on. Meanwhile, pass that weed.
lol...boxer is a tool.
So the proposal is to tax 50% of the money that the government gave to the banks which was used to pay bonuses. Makes sense. I'm OK with incompetent banksters getting billions in free money, but they should at least give some of it back. Take THAT banksters!
posting this again because I can't believe how brazen this is, can some conservative candidate go Tea-Party on Cantor in his primary?
The article says banksters have "buyers remorse" about Obama and the Dems?!?
How is it that our political leadership is openly stated as a commodity to be bought, by a current representative no less.
I suppose banksters have it so good they can say they can say they are disappointed in the Mercedes compared to the Ferrari
"I sense a lot of dissatisfaction and a lot of buyer's remorse on Wall Street," said Rep. Eric Cantor (R., Va.), the second-ranking House Republican and a top Wall Street fund-raiser for his party.
http://online.wsj.com/article/SB20001424052748703575004575043612216461790.html
That's nothing. Wait till they experience sellers remorse for selling the american public.
Liar's remorse. No surprise two weeks after our Supreme Court rules you can't stop corporations from buying our candidates. They know they're in the clear now. Expect bolder statements. JR #219525 said it well. I thought I would have to wait til I was 75 before I complained about the government full time. I guess the only thing worse is when I can't. And that's probably coming.
How about a sales or "Value Added" tax on political contributions, since the contributors are buying votes or some sweet legislation. great value, tit for tat, quid pro quo.
I am for capitalism free markets ,etc. But these new york harvard banksters lost trillions of $'s. Even if they didnt receive taxpayor monies, they should be required to work free until some of the monies is recouped. If they dont recoup, then they are forbidden from working in FIRE for 20 years. Problem solved. Isnt this a just solution? Is losing trillions, receiving taxpayor monies, then receiving mega bonus for failure a logical decision? these are criminals and at best abject failures. It is a failure of the Ivy League education mechanism.
My suggestion: remain anonymous. And if possible, don't post any more comments.
we don't have 'capitalism free markets,etc'. which is how the banks got bailed out.
M* f*ckers! I got taxed 50% on my $9500 bonus and I'm not even in financial industry. Are they telling me these f*ckers did not even pay 50%. F**ck this as a good news.
agreed a small 1000 bonus to regular worker gets taxes at almost 50 percent, we pay FICA, bonus is wages etc...likely these guys have to pay 15 percent max on these earnings, and they get past the FICA tax ceiling on wages, at around 100k in their first few months or so of wages...so we pay FICA on all our wages, they get a raise/tax break after a few months and much of their earnings are not wages, and what gets taxed the most, wages!
Wait. NY city tax 10%. Ny state tax 10%. Federal tax 38%. Thats 58% tax. so are they proposing reducing the tax to 50%? Slick con artists!
Maybe we could just bring in the "excess benefits tax" that applies to 501(c)(3) organizations that pay above market value to insiders/related parties. I mean, after all, the level of government support for these banksters exceeds that for almost any industry or entity that actually has a 501(c)(3) exemption.
Yeah, so sad. If they all leave due to the tax, where would we continue to get all these financial innovation products that we've all grown to love so much???
Football? We actually import billions of $'s of fubol to the US. Fox, ESPN, Setanta, GolTV, Telemundo, ABC, etc all have huge contracts to televise futbol in the US. We also import futbol players to the US. Although lately we hav exported a few players to europe for big dough: jose altidore (10 million), Clint dempset 5 million), Tim Howard 2 million, Landon Donovon (expected 10-20 million). If our kids wouldnt be so fat and unccordinated, we could make billions from our soccer exports.
Just what would be the tax rate for these banksters anyway? What's so shocking about 50% after 400k of "targeted bonuses"? Does the US have that shitty a progressive tax system?
Here in Canada I'm looking at a 39% marginal rate just because I doubled my rather normal white collar employment income by trading last year. So in Canada one pays marginally at 39% on not even 200K, and a very wealthy financial system greaser in the States gets upset because he might pay 50% of a very large number that doesn't even represent his entire income. Fucking assholes.
I was a New York banker and I moved to Hong Kong. Guess what, I still pay US Income tax. So, there is no escape.
Check out Mark Nestmann's blog... there is escape if you're willing to jump through the hoops. (And it's all legal.)
Kind of pointless unless the tax is progressive. 50% of $9 million still leaves $4.5 million.