Thursday, March 19, 2009

Absolute Intolerable Government (AIG)

While for the most part I veer away from discussing specific political policies on here, preferring to speak in more over arching generalities, I cannot ignore this AIG tax because it is a flat out scary precedent. For those of you who need to be caught up to speed real quickly, please follow because this could affect you one day.
Simplified, American International Group, Inc. (AIG) got into some serious financial trouble and to avoid going under, got bailed out with much more than a couple billion dollars by the US government (essentially, we the people, because our taxes are paying for it). Word recently got out that despite their short comings and borrowed money, $165 million was being paid out as bonuses to some of AIG's employees. It was certainly outrageous because no one who dooms a company to financial failure should be given a bonus, but my understanding is that these bonuses were promised before the bailout. There was even a provision in the stimulus bill protecting these bonuses (yeah the same stimulus bill that your Representative signed without reading the whole way through).
Okay, now that you are caught up with the drama and outrage, here is where it gets flat out scary. The government, in an attempt to correct their own error, wants to tax these bonuses at 90%!!! Let me a go a bit more in depth, because if you don't realize what is happening, you should be enlightened. Despite the sheer stupidity of the undeserved bonuses and our taxes that will be paying for it, it is the government's fault for protecting that and allowing those to be guaranteed.
Why I am very very concerned is because the government is REWRITING TAX CODE TO TARGET SPECIFIC PRIVATE CITIZENS. They are not going after AIG as a corporation or criticizing them for paying billions of your tax money to foreign banks (oh, that is a whole other rant). No, they are targeting private citizens on specific money and at an outrageous 90% of the earnings. Why this is scary is because you could be next! I am not trying to fear monger, but with our growing deficit, that money is going to need to paid back. What is to say that the government won't come up with a tax that targets a certain group that you are in? And to what excess? 90% is very excessive. Even though I admittedly did limited research, I am not so sure that this is even constitutional.
I have long been a proponent of the Fair Tax system for reasons like this. The government has too much power over private citizens and it is overstepping their bounds. Rewriting tax code in a matter like this is very serious. As much as I hate AIG right now, I abhor this measure. Do you think it will stop with AIG? I think the government, if they are allowed to get away with this will use it for future taxation policies. Scary future potentially ahead.

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