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Kucinich To Introduce Legislation To Mirror UK Banker Bonuses

Tyler Durden's picture




 

Maybe Goldman traders should put off buying those Ferraris (the two for the price of three special will be back) for at least a few more days: Congressman Kucinich has announced that even after his proposed amendment to HR 4173 to tax TARP recipients was shot down, he "will be introducing legislation based on the amendment that [he] offered, that will pave the way for a more fair and just tax treatment of absurd bonuses in the financial industry."

It will be useful to see if the vote goes once again along party lines, in which case the banana republic nature of America will truly shine, as republicans and democrats finally confirm they have terminally flip-flopped on all issues pertaining to Wall Street, even as Main Street anger over banker compensation continues rising. If this proposal gets voted on, Democrats, who will likely once again vote it down, stand to reap the full fury of over 300 million Americans, who will realize that the Democratic party now holds banker remuneration and bonus concerns closer to its heart than those of small and medium-sized businesses (let along Joe Sixpack). And in that case, watch out come mid-term election time. Now if only Bernanke's reappointment can be stalled for another year, there just may be a little hope for capitalism yet.

From Kucinich' website:

Department of General Services (www.dgs.ca.gov) serves as the business manager for the State of California, with more than 4,000 employees and a budget in excess of $1 billion. DGS helps state government better serve the public by providing services to state agencies including innovative procurement and acquisition solutions, creative real estate management, leasing and design services, environmentally friendly transportation, and architectural “Today, Goldman Sachs bowed to public pressure and promised to suspend bonus payments to its top executives.  It’s important to understand this in perspective. Goldman did this only in the face of deafening public criticism over bonus payments to bankers.

“Once the uproar subsides, executives throughout the financial services industry will return to the same practice of showering themselves with outrageous compensation packages and bonuses.

“We need to reform fundamentally our tax code so that we don’t have to rely on extraordinary public outcry to curb such excessive behavior.

“I offered a commonsense amendment to HR 4173, the Wall Street Reform and Consumer Protection Act, that would have taxed the bonuses of executives at TARP recipients, as well as the profits reported by these institutions. My amendment simply acknowledged that without the extraordinary actions of the federal government, many of these institutions would have collapsed a long time ago, and it would have held to account those individuals that made the decisions and that led to the crisis.

“Unfortunately my amendment was not accepted by the Rules Committee.  Soon I will be introducing legislation based on the amendment that I offered, that will pave the way for a more fair and just tax treatment of absurd bonuses in the financial industry.

“Leaders in Great Britain and France have recently announced proposals to tax the bonuses of financial executives--if the United States remains silent on the issue, we will in effect be leading the world in a ‘race to the bottom’ of international efforts to regulate the financial services industry.

 

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Fri, 12/11/2009 - 17:45 | 160580 Cursive
Cursive's picture

He's got my support and I'll call my senators and reps. on this one, too.  It's amazing that BAC got a loan (an effing LOAN!) from the FR to help with the payback of the TARP.  Do they really think we are that stupid?

Fri, 12/11/2009 - 19:10 | 160679 Anonymous
Anonymous's picture

They KNOW we are that stupid... what have we done to stop this crap????

Fri, 12/11/2009 - 19:35 | 160699 jdun
jdun's picture

American as well as European are stupid. Tax never solve anything other then giving money to useless government workers.

Fri, 12/11/2009 - 20:28 | 160741 Mr. Anonymous
Mr. Anonymous's picture

Frankly, it doesn't have to 'solve' anything to work for me.  Just punish the bastards where it matters: their bank account.  If that doesn't work, kill them.

Fri, 12/11/2009 - 21:42 | 160833 albion402
albion402's picture

Agreed...just shaft the banks and bankers! 

Make the buggers spend their ill-gotten bonuses defending themselves!

 

Fri, 12/11/2009 - 21:54 | 160843 jdun
jdun's picture

Oh my fuckign God. If you want to punish anybody send them to jail or chair. That’s it and it isn’t hard to figure out.

 

Like all taxes it is a way to keep useless government workers on the job with paid raise while the rest of America suffer.

 

Sat, 12/12/2009 - 00:23 | 160960 mock turtle
mock turtle's picture

oh dear decisions decisions

let me see

employ more gov employees

or

punish bankstas

let me think

let me think

ok ok  got it...i pick punish bankstas

but its gotta hurt alot, so here it is

100% tax rate for income to any banksta from any bankstas source in excess of GS16

yeah thats the ticket

 

Fri, 12/11/2009 - 21:44 | 160835 Anonymous
Anonymous's picture

That is true, fed govt pay/benefits are up.

Fri, 12/11/2009 - 22:06 | 160854 Cursive
Cursive's picture

We're not stupid, Anon.  Most Americans have raised their voices only to be ignored.  We just have to raise our voices more and be relentless.  We have no choice now.  I think we're going to win.

Fri, 12/11/2009 - 17:46 | 160582 bugs_
bugs_'s picture

Equal protection under the law.

Fri, 12/11/2009 - 21:56 | 160846 jdun
jdun's picture

Or equality through proverty.

Fri, 12/11/2009 - 17:56 | 160600 anynonmous
anynonmous's picture

smart move - he's calling them out and this will play well with the populist hoards when it gets voted down

Fri, 12/11/2009 - 17:57 | 160603 Stevm30
Stevm30's picture

The people whose incomes should really be docked are those that caused this problem in the first place.  They are those voting "yea" below....

http://clerk.house.gov/evs/2008/roll681.xml

http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm...

Fri, 12/11/2009 - 18:39 | 160652 Anonymous
Anonymous's picture

Dock the income!?! Come on, all their related assets need to be seized as well.

It is standard operating procedure for Federal Law Enforcement to seize all assets related to a Federal Crime. And it's the burden of the assets (believe it or not) to prove that they are innocent and not guilty.

Some of the States used to do this, until the corruption of Law Enforcement could no longer be kept quiet. Cops would regularly take stuff for their own personal use.

Strip the financial crooks of all their assets, I say. That might put a dent in the deficit.

Fri, 12/11/2009 - 17:57 | 160604 JohnKing
JohnKing's picture

I don't agree with the method (taxation) but I do believe that the dumb asses at Goldman should read the writing on the wall and use the bonus pool to get the off the gov't dole. How short sighted can they be? Pay it down, get off the radar and live to fight another day.

Fri, 12/11/2009 - 18:02 | 160610 Anonymous
Anonymous's picture

The question ought not be the level of taxation of bonuses, but the origin of the bonuses. The real question is, How can insolvent banks/brokerages (operational thanks to lax accounting) generate such high earnings amidst such an economic collapse, with 22% unemployment and 5% inflation? (shadowstats.com)

Fri, 12/11/2009 - 18:44 | 160649 anynonmous
anynonmous's picture

if I hear one more report on the great retail sales 

I posted the "real" numbers early this morning (the increase is mostly higher gasoline prices - i.e. unfavorable )

 

($ millions)                 Month over Month                          Year over Year       
Total Retail           1.29%    352,073    347,605        1.90%    352,073    345,508

less cars               1.23%    292,145    288,608        1.30%    292,145    288,400

less cars and gas  0.64%   258,842    257,197        0.37%    258,842    257,892

Fri, 12/11/2009 - 18:47 | 160660 AnonymousMonetarist
AnonymousMonetarist's picture

Goldie is sending a UFO to Kucinich's house right now...

 

Fri, 12/11/2009 - 19:25 | 160689 tip e. canoe
tip e. canoe's picture

is it like the one they sent to celebrate the war & peace prize?

http://www.dailymail.co.uk/news/worldnews/article-1234430/Mystery-spiral...

Fri, 12/11/2009 - 18:50 | 160661 Anonymous
Anonymous's picture

Is the Gov't setting salaries at GM too?

Why not fix prices while they're at it?
Oh, right - They're trying that in healthcare.

Why does the gov't get to determine who gets what pay?

People on this blog are incredible-
one minute you complain that the US is becoming the USSR;
the next you applaud the clear destructuion of the Constitution, contract law and capitalism.

Fri, 12/11/2009 - 20:13 | 160731 tip e. canoe
tip e. canoe's picture

war is peace & peace is war
up is down & down is up
left is right & right is left

if you can't beat em, join em ;)

Fri, 12/11/2009 - 23:07 | 160904 delacroix
delacroix's picture

and losses, are now profits. OMFG I might be fucking rich, I just wasn't looking at it right. thank you wall street, I feel so much better now.

Fri, 12/11/2009 - 21:18 | 160807 Hephasteus
Hephasteus's picture

Sure just show me the contract that all the taxpayers signed saying they'd co-sign for every contract these idiots make.

Sun, 12/13/2009 - 10:03 | 161860 FreddyInBangkok
FreddyInBangkok's picture

i believe that signature is made by default on registration of birth certificate hence your name on all official docs in CAPITALS

Fri, 12/11/2009 - 18:50 | 160662 Anonymous
Anonymous's picture

I remebered the BAC tarp payment. Could ZH please detail how is BAC using the excess reserve(dopsiters money)to pay the lion share of their TARP ?. And how are they going to compensate for that?issuing bonds for the depositors without their knowledge?. More details are needed than just the article about their unusual equity offering....

Fri, 12/11/2009 - 19:06 | 160674 Anonymous
Anonymous's picture

It's BFF, Sheila on vacation?

Fri, 12/11/2009 - 20:52 | 160774 rawsienna
rawsienna's picture

Taxing the profits for fiscal year 2009 makes sense.  The wealth transfer from savers to thr banking system, thx to zero percent interest rates, should not be made worse by paying bonuses on these earnings.

Fri, 12/11/2009 - 21:00 | 160782 desk-jockey
desk-jockey's picture

dear kooch:

i. heart. you.

signed, the secretary in every one of your offices, dear readers.

and by "heart", it's likely that i mean "will vote for you".

Fri, 12/11/2009 - 21:00 | 160784 Cistercian
Cistercian's picture

 I think a tax or fee for privateering is in order.If you are a financial pirate looting the system destructively, I think that should be discouraged.How about a 99.995% withholding tax and a fee equal to 10 times your earnings for those who through regulatory capture and political juice elude the proper end to their actions, namely incarceration.Even a syphilitic monkey should be able to discern the guilty parties this year.

Fri, 12/11/2009 - 22:39 | 160880 waterdog
waterdog's picture

My God, I knew things were bad but, I did not think that they were so bad we would start following the British and French.

If we treated the Mafia like we are treating Wall Street, we would all be dead.

Fri, 12/11/2009 - 23:35 | 160928 Anonymous
Anonymous's picture

AMERICAN BANKERS need a 90% TAX considering the destruction they have wrought!!

Bring it on Dennis!! You are one of the few people in DC that has the balls and brains to figure out that our whole economy is one big PONZI!!

Stop the daylight robbery--We are behind you!

Fri, 12/11/2009 - 23:41 | 160932 zhandax
zhandax's picture

How about a blanket "any compensation in excess of 500 times the national mean is taxed at 90%"?  Built-in clawback clause.

And what kind of world do we live in that Kucinich is making sense?

Sat, 12/12/2009 - 09:20 | 161082 chindit13
chindit13's picture

While I am not fond of taxes that will undoubtedly be poorly spent, not a single one of these firms would still be in business without taxpayer assistance.  And let us not forget they were the architects of the disaster from which we all now suffer.  I find it unfathomable that we would allow them to compensate themselves inordinately for their their own mistakes and at OUR expense.  One hundred percent bonus tax above $250K seems fair under the circumstances.  If they don't like it, go private and next time they f**k up it's on their own dime.

Sat, 12/12/2009 - 10:18 | 161101 Pat C
Pat C's picture

ZH, yes please more information on BAC loan to pay-off TARP if you can find it.  I send all this stuff to my senator(s).  Also more on the GS deferral of bonuses and restricted stock etc..  My initial reaction was that this was nothing more than a sham.  Since they are now a bank all their executives need to do is use the stock as collateral to get a loan in case they need some dough and maybe even defer some taxes.

Sat, 12/12/2009 - 11:46 | 161147 Anonymous
Anonymous's picture

This site is always chock full of politcal pandering populist leftists. The party in power in the US is looking to follow the European socialist movement whenever possible presumably because Europe has been the engine of economic growth the past decade or two as demonstrated by their consistently slower growth and higher unemployment.

If you do not like the pay practices of banks, then a) do not own their shares, b)keep your deposits at your house and c) tell your government not to give the banks any money. Companies should be able to pay whatever they (the shareholders) want. If you think they are using government money to do it, call your elected representative to take away that money. Problem solved.

Narrowly targeting taxes and tax rates is classic liberal social engineering those with absolute faith in government embrace. Maybe we should target high tax rates on say Katie Couric (and all other MSM types) who are paid way too much as they use the public airwaves (government owned) to create their wealth. Other examples abound.

You all voted for the morons in power. The rest of us are working on how to profit from the stupidity in Wash DC you love.

Sat, 12/12/2009 - 16:51 | 161402 Missing_Link
Missing_Link's picture

Actually, no, you've got it exactly wrong.

Many of us lean to the right; I voted for Bush twice, then McCain in '08.  I support both wars.

I hate Kucinich, but I agree with this one proposal.

The overwhelming majority of us despise Washington, particularly for its lack of decent regulatory oversight.

As a fellow conservative, I must ask:

HOW IN HELL DO YOU NOT SEE THE FUCKING WRITING ON THE WALL AFTER 2007-09?

Listen to Paul Volcker when he asks, what good has all of Wall Street's "financial engineering" done for society?  Is it anything other than creative accounting by another name?  Has it done anything other than to gradually force our industries offshore, to China and Taiwan, and cut the legs out from under the middle class?

 

If you think they are using government money to do it, call your elected representative to take away that money. Problem solved.

What planet do you live on, exactly?  Have you not been paying attention to TARP and the stimulus packages and all the other bailouts?  Can you not see the triangle, in which Wall Street takes from Main Street and bribes the federal government to bail out Main Street again?

Sun, 12/13/2009 - 11:44 | 161911 Anonymous
Anonymous's picture

Wall Street owes no duty to Main Street compared to any other for-profit enterprise. Wall Street has not "forced" industries offshore. Industries went there for cheaper resources than the US can offer (meaning it is more expensive to do things here than elsewhere in the world - that is not "Wall Street's" fault). The US wants a high standard of living and millions of pages of regulations and thinks it can be competitive with global workers who do not insist on having a big house, two cars, a big screen TV, a cell phone, going out to movies and restaurants, vacations, Social Security Trust Fund (Ha), etc. Many in our country can not compete with others who are willing to work harder than US workers for less money than US workers. The US has gotten away with it for many years because of productivity, but now with electricity, computers, and knowledge becoming common place across the globe, the productivity advantage is shrinking. No company or industry owes American citizens a job.

If you do not like what "Wall Street" or any other group is doing with the money government is giving to them via TARP, bailouts, stimulus, or any other program, TAKE AWAY THE GOVERNMENT FUNDING---- that is the source of the problem.

"Wall Street takes from Main Street" -- accordingly, every for profit company "takes from Main Street" -- you just do not like the way or magnitude of how Wall Street does it. In which case you might consider not keeping any of your personal capital in of Wall Street's hands given your view.

Mon, 12/14/2009 - 08:28 | 163073 Anonymous
Anonymous's picture

Those in support of taxing bonuses are completely unfamiliar with the "gross up" concept as it applies to compensation.

The reason bonuses are Goldman Sucks are in the 19 billion dollar range is not because the banksters earned the bonuses but because they are anticipating a surtax and raising the bonuses to compensate for more than the tax.

Once again, a populist notion is flawed because the people haven't even a kindergarten level of financial savvy.

The banksters win again.

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