Tag Archives: timothy geithner

This AIG Thing is Just a Mess and It Looks Like It Can’t Be Fixed

The government bailouts AIG, and AIG doles out millions of taxpayer dollars in bonuses to employees who created this mess in the first place. Most Americans are angry and rightfully so, but how do you fix it? Some in Congress are saying break the contract. They contend contracts are broken or re-negotiated everyday. The more frightening response is using the tax code as a punitive weapon. Some are suggesting that the bonuses be taxed at 100%. Is this really fair? Most of the bonuses are being paid to employees at the London office so this would have no effect on them. So in reality it would be largely symbolic since the majority of recipients would not be fazed by it, but is this the way to go? This is a Pandora’s Box that I don’t think we should open. What’s to stop the government from using this weapon recklessly in other scenarios unlike this one? This is a mess that started out wrong, but the fact is two wrongs don’t make a right and punitive taxing is just wrong.