U.S. TREASURY’S BONUS SHORTCUT
Using the procedures in bankruptcy reorganizations can help solve the AIG and other executive bonus concerns. Rather than pass a law taxing 90% of such bonuses, all that Congress has to do is enact the following legislation.
If a company opts to accept government financing, all of its executive and union employment agreements must be disclosed and are deemed terminated. Such a provision would be equivalent to a Chapter 11 bankruptcy filing without the extensive and expensive court filings.
The U.S. government’s lending organization under this legislation would then have to approve of any changes in such agreements and disclose the new compensation arrangements.
We can thus eliminate the “in-and-out” of the bonus bucks and forget the need to tax. If they don’t get the bonus money, we don’t need it back via the IRS.