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President Obama can do more than showing anger, and vowing to prevent such occurrences in the future.  There is a mechanism available that will reverse this giveaway of taxpayers' funds.

Before the current stimulus is passed, before another dime goes to those greed intoxicated traders, managers and CEOs of Banks, Investment houses and Stock Brokerages that have brought the world's economy to its knees, something must be done to redress this outrage.

From the N.Y. Times, What Red Ink? Wall Street Paid Hefty Bonuses

Despite crippling losses, multibillion-dollar bailouts and the passing of some of the most prominent names in the business, employees at financial companies in New York, the now-diminished world capital of capital, collected an estimated $18.4 billion in bonuses for the year.

That was the sixth-largest haul on record, according to a report released Wednesday by the New York State comptroller.

These bonuses went to those who promoted the lowering of tax rates for dividends, estates and the top income that they were receiving as they were undermining the very institutions that they were part of.  Now it's the turn of the trusting souls who were to be the ultimate patsies, those who invested their life savings in their supposedly secure regulated corporations, only to have their equity destroyed by their irresponsibility.  

This must be passed immediately.

Provision for special tax rate on revenue from TARP supported corporations

Any employee, consultant or officer of any entity that was the recipient of funds provided under Public Law 110.348 commonly known as Toxic Asset Relief Program shall have the portion of income consisting of special discretionary remuneration taxed at the following rate.

Amount up to $50,000 as ordinary income
Amount Over $50,000 up to $500,000 at 75%
Amount over $500,000 at 95%  

The money for these bonuses were never earned, and those who recieved them in a more just society would be punished for their actions that contributed to destroying their companies, and the livelihoods of millions of innocent victims.

For those who doubt that this would be constitutional based on the proscription against ex-post facto laws, such restrictions only apply to criminal legislation.  This comment from my earlier diary today gives the relevant SCOTUS precedent. Important enough that I'll show it here, thanks to user Photoghog:

As stated in Karpa v. C.I.R., 909 F.2d 784, 786 (4th Cir.,1990)

   The prohibition against ex post facto laws applies only to penal legislation that imposes or increases criminal punishment for conduct predating its enactment... The ex post facto clause is not applicable to legislation imposing civil disabilities...Applying these general principles, the Supreme Court rejected an ex post facto challenge to Connecticut's retrospective application of a tax penalty in Bankers' Trust Co. v. Blodgett, 260 U.S. 647,... The statute challenged in Bankers' Trust imposed a 2% tax on the value of estate property for the five years preceding a decedent's death where it appeared that the property was taxable and no state or local tax had been assessed or paid during the year preceding death... The Court recognized that the sanction for failure to pay taxes is "usually punitive," and the Connecticut provision for "penalizing a delinquency" was no exception... But the Court held that "[t]he penalty of the statute was not in punishment of a crime," and hence the ex post facto prohibition was simply not implicated." [Citations and footnotes omitted.]

Whether this will fly or not, it's time for the Democratic Party to take action by at the least debating this proposal.  The public demands no less.  

Originally posted to ARODB on Thu Jan 29, 2009 at 09:31 PM PST.


Take back their bonuses....

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