Outrage over the AIG bonuses

By Michael Boshnack


We have all heard about the $165 million dollars that AIG paid to its top employees and the American taxpayer outrage that came as a result. Congress has apologized for not making a specification in its deals about the bonuses that could be paid to the firms. I personally do not think that 90% tax on bonuses paid to employees of companies receiving government bail out money will work. It seems unconstitutional and personally undermines the trust in the tax system that I have today. The government messed up plain and simple, they should have set up provisions about the bonuses that could be paid. To me it was not such a hard problem to figure out how much these AIG executives should make. The government owns 80% of the company; pay them 80% at government salary bonuses and the remaining 20% they would make as if AIG were a private company. This way instead of a $1 million dollar bonus, the AIG employee would receive $200,00 from AIG and probably $15,000 like every other government employee. The lesson to be learned from the whole financial mess is the usefulness of foresight and how important risk aversion is to the overall health of our country and economy.

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