Merrill Lynch’s $3.6 billion bonus pool has been among the most controversial payouts on Wall Street. But most of those bonuses, which included some 700 awards of over $1 million, would not be affected by a new bonus tax being considered in Congress.
The tax, which passed in the House on Thursday, would affect only bonuses paid during 2009. Typically, Merrill’s bonuses are paid in January, along with the rest of Wall Street’s. But the investment bank pushed $2.5 billion of the bonuses out the door in December in advance of its merger with Bank of America.
It is unclear whether the bonus tax will pass in the Senate, where the tax rate being proposed on the bonuses is 33 percent. That is far lower than the 90 percent tax that passed in the House. It is also unclear how many banks the tax would affect. Both bills apply to companies that received bailout money, but the House bill covers only the largest companies while the Senate bill includes midsize banks.
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The Washington Times reported in an editorial on Friday that $55 million of the controversial A.I.G. bonuses were also paid last year.
Morgan Stanley and Goldman Sachs announced their bonus pools in December, but representatives for the two firms said the bonuses were actually paid in January.
MORE...Here's the "squeeze" (for both Republican and Democratic lawmakers): They don't dare ignore the public outrage over the bailouts and the bonuses. So they have to do
something.
Already, there are a lot of people who think any government bailout is pure socialism. These folks would prefer that the government didn't help out the big financial institutions. Since the alternative is worldwide economic disaster, logic dictates this would be their preference.
These are also the same folks who are adamantly opposed to tax relief for middle class families. They call it "economic redistribution." Or something like that. More socialism. I think.
These are also the same folks who feel it is utterly wrong for government to have even an opinion about the obscene amounts of money paid to the bosses of big business much less to allow government to actually have a hand in protecting the American people's humungous investment in these failing corporations.
And now the public is screaming for blood and the same folks as I described above are faced with a quandry: Do they go along with the public sentiment and vote against their big business pals and take that fateful step along the path to Evil Socialism (or, as another point of view might describe it, force accountability to the American people for their multi-billion dollar investment) or do they uphold their principles?
If they betray their usual talking points and their base constituency now, what will they face the next time they are up for election? And, if they do
not betray their principles now and they fight accountability to the American people, what will they face the next time they are up for election? Where do their self-interests lie?
Are the folks screaming about corporate greed now also going to scream when the corporate greedy ones are held accountable?
