There are multiple issues I can find with this legislation, but I will only discuss three of them. This is an unfair taxation of a large portion of Americans, this tax increase is not directed specifically at misallocation of resources by executives, and lastly this is another example of fear allowing government officials to have a free hand to collect more money.
The legislation that was passed is designed to make a tax of 90% on any bonus that a family receives in a year if that family’s combined income is more than $250,000. It is very difficult to believe that many of the targeted executives are making $250,000 combined earnings after bonuses. This impacts a much larger portion of American than seems to be indicated by an arbitrary number. Not only does this legislation apply to companies who receive more than $5b in bailout money, but it also applies to any company who does business with that company!
Any legislation specifically targeting executives; CEO’s, CFO’s, Chairmen, etc, would not be designed starting at such a low salary. Americans are not upset with Mr. John Smith Vice President who makes $150,000 a year, they are concerned about AIG executives and other executives with low moral standing like that of the Enron scandal. Because some top executives agreed to take pay cuts in order to gain bailout money does not mean all managers and lower ranked executives should. Executives have much more riding on the line than the average worker, as one can see by the heat that is being drawn by them currently. They are responsible for the decisions of the companies, divisions, regions, and teams. Without good leadership not much gets done in this world. It is appalling how in times of chaos leadership is the first to be attacked no matter what position it may be.
The fear that is being pumped into the American public each and every day has been ripening. For government officials to take the eyes off of themselves they use Wall Street as a scapegoat. Fear is an amazing tool to accomplish policy, but it is not the proper tool. The use of fear is very Machiavellian, and from an administration that is supposed to be for change and hope there is not much hope I see for change. The Obama administration needs to help quell the fear first before Americans can feel safe again. When Americans feel safe again they will start to function like regular consumers which will hasten market stabilization. This is the ultimate goal, stabilization. The current administration is doing this country great and perhaps irreprible harm by instilling fear into the hearts and minds of the average citizen. The only possible goal of the Obama administration in using this tactic is to solidify his political power and to gain more tax revinue to pay for stimulus spending, graft, and social projects.
Trey Gowdy grills Rod Rosenstein
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