Friday, March 20, 2009

Headline DS Edition #50 - Bonus Tax

AIG week ends here at Headline DS with "Big Bonus Tax Ok'd by House" from the March 20, 2009 edition of the Express. The House passed a bill yesterday that would levy a 90% tax on bonuses paid out to workers who earn more than $250,000 in annual income and who work in companies that received more than $5 billion in bail out money. A similar bill goes up for vote in the Senate.

This sounds a bit crazy. Certainly the measure reflects public outrage against AIG. But this sets up a dangerous precedent for singling out companies just because we don't like them. Congress should be a little more cautious than to respond directly to mob outrage. Setting up an additional tax structure like this could create more future problems than it solves. At this point, it'd probably be easier to let AIG fail.

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