Bailout bonus rage is midirected.
Sure, a massive income tax sounds good when it's happening to someone else. But what about if it was happening to you? If you think the average taxpayer can't become the victim of a massive money grab by politicians, you're wrong. Even this tax on AIG employees is hitting innocent parties.
How can that be? The tax bill passed by the House of Representatives by a vote of 328 to 93 imposes the income tax on families with income above $250,000 and wages from AIG. What about the family with one spouse working at AIG and another spouse at a separate company? If their income is over $250,000, they're going to be hit by this. Is it fair that the spouse's income (unrelated to AIG) is included in that $250,000 threshold? No, it's not.
But even worse is the basic principle of our government enacting a tax that takes away almost all of a taxpayer's income. When we allow this to happen once, we open the door for it to happen over and over again in the future. This is not the role of our government. We should not let them steal more and more money from taxpayers. And with the spending frenzy our government is in, the only way to pay for it is by taxing more. Where does it end? It doesn't. The taxes get higher and higher, and no taxpayer will be immune.
If there's a problem with how federal bailout funds are being spent, the answer is not to tax the individuals who have indirectly received some of the bailout money. The answer is to not do the bailouts in the first place. Any company that needs charity from the taxpayers to stay in business ought to fail. Let the free market work.
Yes, there would have been some pain from the failure of AIG. But it certainly can't be any worse than the pain being inflicted on future generations who will have to foot the bill for the trillions of dollars being given away to failing companies. Let's redirect our anger toward the proper parties: Our lawmakers who are recklessly spending our money on these ridiculous bailouts.
Forensic accountant Tracy Coenen investigates corporate fraud and consumer scams, and is the author of Expert Fraud Investigation and Essentials of Corporate Fraud.