Hundreds Washington Mutual employees were promised bonuses if they stayed to help the transition to JPMorgan Chase now face punitive taxes imposed by our senators and representatives.
Senator Maria Cantwell is greeting them with the top tax rate of 35% in S.561.*
Tax cheater Honorable Charles Rangel will tax the higher middle-income ones at 90%. H.R.1586* has passed the House and is now in the Senate. A two-income family receiving this bonus could pass the $250,000 cut-off and get the rest taken away. Let's look at a family with two people making $90k each where one is a WaMu employee in the transition for 12 months.
The WaMu employee's bonus equals that pay for the transition - $90k more. So the family income would make $270k - once only. So they would lose 90% of the amount over $250k in addition to all the regular taxes, just when they need the cash to survive being unemployed for months. The employee could have left months ago when the job market was better, but stayed to help and now gets clobbered by the new owner - Congress.Seattle Times Newspaper:
Hundreds of former Washington Mutual employees, expected to lose their jobs this year after working temporarily as part of JPMorgan Chase's transition team, could get winged by the congressional shotgun blast aimed at recouping multimillion-dollar bonuses paid to executives at insurance giant American International Group.* Correction and Update Search Thomas for H.R.1586 and S.651. H.R.1586 has passed the House and is very much alive in the Senate. It's current status:That's because the retention bonuses JPMorgan Chase promised those workers to get them to stick around would be taxed heavily under either of two bills in the Senate.
[...] After word of the AIG bonuses spread, an outraged House quickly passed a bill aimed at recovering them.
Ninety percent tax -- The measure, now in the Senate, would slap a 90 percent tax on bonuses given to employees of companies that received more than $5 billion in federal bailout money (including JPMorgan Chase).
The tax would apply to all workers whose household adjusted gross income exceeds $250,000.
The Senate also is considering another version. That bill -- whose co-sponsors include Sen. Maria Cantwell, D-Wash. -- would impose a 35 percent tax but apply to a wider range of banks and financial-services companies.
Some 4,200 people worked at WaMu's downtown Seattle headquarters when the thrift was acquired by JPMorgan Chase late last year. More than 1,500 of those workers have been laid off; 1,900 or so were asked to stay on temporarily but are to be let go this year.
Those transitional workers are accruing a retention bonus equal to their regular pay rate. They get the bonus when they're laid off.
With severance pay and a spouse's salary added in, "... You could easily have a year where a family hit the $250K mark for the first time in their lives ... only to have it confiscated by the federal government in a recession where we need that money to survive a long job search," another WaMu employee wrote in an e-mail.
3/23/2009 Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 36.Posted by Ron Hebron at April 01, 2009 07:23 AM | Email This
This is the same nonsense, and as a matter of constitutional fact bills of attainder don't work any better this week against WAMU than they did two weeks ago against AIG.
I actually wish one of these idiot bills would go through, so someone from AIG or WAMU could sue, get it into the hands of a court, already; and then we could see just where our congress, senate, and white house stand with respect to the Constitution. Even the idiots who voted for Jug-ears might find that enlightening.
Posted by: jj on April 1, 2009 08:43 AMSo if your company is going down the tubes and you say, "if you want me to stay, you need to make it REALLY worth my while," then you are doing something wrong.
OT: OMG algore you can kiss my globalwarmed butt...when was the last time it snowed in April????????????
I suppose that should there be a contractual obligartion existing, that our politicians have entered into, the U.S. Department of Populist Rage Exploitation will be holding a bus tour of those employee's home who refuses to have what is contractually owed them expropriated.
This whole debacle makes me sick.
Posted by: JDH on April 1, 2009 10:10 AMI suppose that should there be a contractual obligartion existing, that our politicians have entered into, the U.S. Department of Populist Rage Exploitation will be holding a bus tour of those employee's home who refuses to have what is contractually owed them expropriated.
This whole debacle makes me sick.
Posted by: JDH on April 1, 2009 10:12 AMI suppose that should there be a contractual obligartion existing, that our politicians have entered into, the U.S. Department of Populist Rage Exploitation will be holding a bus tour of those employee's home who refuses to have what is contractually owed them expropriated.
This whole debacle makes me sick.
Posted by: JDH on April 1, 2009 10:12 AMActually it's even less extortionist than that. Usually the company determines what they think will attract the talent, and then make the offer to those they want to keep in the hopes that they will keep enough. Usually the employee is not presenting a "give me this much or I'll walk" kind of statement.
Posted by: eyago on April 1, 2009 10:32 AMThe president and the media have made a really big deal out of AIG�s $165 million bonuses. That represents two-hundredths of 1 percent of the $825 billion stimulus money. While they keep us focused on that bit of graft, what do you suppose is happening with the other $824.835 billion (99.98 percent) of our great grandchildren�s money? Wisely used and not worthy of investigation, probably.
Bingo! It's an old magician's trick: keep your audience focused on your right hand while your left hand is doing all the magic.
04-01-2009 14:48 by Right-Mind to Right Mind
Posted by: Ray on April 1, 2009 01:05 PMWhen a company offers a retention bonus to keep a key employee during a period of uncertainty or restructuring, it is salary. It is deferred salary structured to incentivize an employee to stay during the period the company foresees a need even though the employee knows they won't have a job after the contract period. This is not a special performance bonus, it is a promise to hard working people to compensate them for the opportunity cost of finding a new, more stable job immediately.
Not only can you not legally adjust someone's compensation after the fact without mutual consent or a bankruptcy decree, but congress is specifically prohibited from ex post facto legislation. They cannot constitutionally change the rules because they don't like the results of the game.
Of course, congress doesn't really need to follow the constitution, it's just an idea, a living document if you will, that can be interpreted as our honored representatives see fit.
This is still a discussion worth having as it exposes the vindictiveness of the socialists currently in control of our government.
Every time they float these hateful, class warfare based ideas we need to expose it to public ridicule in order to stop it. And also hopefully to cause a few of them to be retired in the next election.
Posted by: Kato on April 1, 2009 03:06 PMBut from wikipedia:
In the 1994 opinion United States v. Carlton, the U.S. Supreme Court unanimously held that retroactive tax laws did not violate the constitutional prohibition on ex post facto legislation, provided their retroactive application was "supported by a legitimate legislative purpose furthered by rational means".
Indeed, Congress changes tax laws retroactively every year. I don't think the bonus surtax should apply to WaMu bonuses, but I don't think it would pose constitutional problems if it did. It's simply bad policy, and I suspect the law's authors would agree. But I don't know whether they care enough to change it at this point.
Posted by: Bruce on April 1, 2009 04:40 PMHow odd, when THEY signed off on these bonuses.
It's called CYA.
It does show how bad our schooling is these days for many folks to become out raged without looking for or understanding the real truth about this.
Get the gov out of schools!!!
Posted by: Medic/Vet on April 1, 2009 05:37 PMSo I wonder if anybody at WaMu is getting buyers remorse yet. But if you are stupid enough to vote for hope & change and little else, probably not.
Posted by: G Jiggy on April 2, 2009 06:07 PMIf the USA worked as per the Constitution, it would be DOA. However:
With the Democratic Party in full class-warfare mode, and with the MSM singing backup minute by minute, we shall see a full Orwellian hate-fest against "the rich" through the whole Federal Court system. Every possible pressure will be put on the Justices to enable taxing those bonuses into nullities.
And the pressure will be coming from the top down: AG Eric Holder just gave the finger to the the legal opinion of the Department's Office of Legal Counsel (OLC), that the D.C. voting rights bill pending in Congress is unconstitutional. He ran sniveling to a different gang of Federal lawyers, and they wiped his eyes and said they'd act as his fixers, Constitution or no.
Holder is now fully committed to being an enforcer for Democratic Party legal maneuvers, not to being a guardian of Constitutional principles.
Guard your remaining valuables, and ready the tar and feathers.
Posted by: Insufficiently Sensitive on April 2, 2009 09:44 PM