Robert Willens, a corporate tax lawyer in New York, said the Senate bonus tax bill would still allow bailout beneficiaries to negotiate higher salaries with employees to compensate for lost bonuses. The Senate bill authorizes the Treasury to issue regulations preventing firms from masking bonus payments as salaries, but it does not prevent firms from handing out raises.
“If the vast majority of bonuses become fixed salaries that would harm the institutions because they would have higher fixed costs,” Willens said. “What happens if the bank suffers through a poor year? It has all these fixed obligations they have to meet. That’s the beauty of the bonuses.”
Although the premise is correct, the application is horrible to say the least. I would think that one would get a 100% concurrence that AIG is having a ‘poor year’, YA THINK… Could AIG be having a extremely terrible year?
One would think, this could be why people are upset.
Maybe we should start a ‘Worst Quotes of the Banking Crisis’ thread.
BTW, I think this is a diversion to keep the masses from the real stories.
