Congress, Pushing Balloons « The Washington Independent
Jul 31, 2020242K Shares6.7M Views
As House leaders are debating a bill to apply a 90 percent tax on controversial bonuses paid by bailout recipients like AIG, at least one Democrat has already found a gaping loophole.
Rep. Brad Sherman (D-Calif.), a member of the House Financial Services Committee, said the bill might rein in bonuses, but it won’t prevent creative Wall Street executives — even those representing bailed-out firms — from being paid handsomely. From his statement:
“„While the bill focuses on bonuses, it does not affect million-dollar-a-month salaries. In fact, a bailed-out bank which might otherwise pay an outrageous bonus, is free to raise an executive’s salary to $2 million a month. Not a penny of that $2 million a month would be taxed or restricted by this bill.
“„The bill also allows unlimited commissions, without defining the word commissions. If Wall Street firms can rename their “bonuses” and call them “commissions,” they may escape the bill entirely.
Sherman brought up similar concernsin January, when House lawmakers were debating legislation to put tighter conditions on bailout spending. But the press largely ignored him, as did Democratic leaders.
Yet with the uproar over AIG’s bonuses reaching a fever pitch — and in light of reportsthat companies are already raising salaries to compensate for the Obama administration’s tougher bonus restrictions — Sherman just might find a larger audience this time around.
If not, you can be sure the next populist outcry won’t be too far off.
Dexter Cooke
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Dexter Cooke is an economist, marketing strategist, and orthopedic surgeon with over 20 years of experience crafting compelling narratives that resonate worldwide.
He holds a Journalism degree from Columbia University, an Economics background from Yale University, and a medical degree with a postdoctoral fellowship in orthopedic medicine from the Medical University of South Carolina.
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