Somebody tell Cuomo STFU. He is just about as bad as his daddy was - and that is bad. Daddy was a terrible gov and sonny is not doing too well as AG.
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March 26, 2009 -- 2:07 p.m.
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Give Back That Bonus!
Oh, and by the way, you still owe taxes on it.By JAMES TARANTO
So, you still work for AIG, having decided not to desert a sinking ship. For this you received a retention bonus, but the politicians have decided to make a scapegoat out of you. Last week the House passed a bill that would tax your bonus at 90%--which, since you live in high-tax New York City, means you'd end up paying more than 100% when you add up all the taxes. In McCarthyite fashion, your state attorney general, Andrew Cuomo, says he has a list of names, as the Washington Post reports:
New York Attorney General Andrew M. Cuomo had subpoenaed AIG for a list of Financial Products employees and how much money each had received.Now, the firm's chief operating officer, Gerry Pasciucco, had set a 5 p.m. Monday deadline for staffers to indicate whether they planned to return their retention payments, and if so, what percentage. His e-mail included what appeared to be a tacit ultimatum from Cuomo."We have received assurances from Attorney General Cuomo that no names will be released by his office before he completes a security review which is expected to take at least a week," Pasciucco wrote."To the extent that we meet certain participation targets, it is not expected that the names would be released at all."In light of all this, you do the right thing and give the bonus back.
Sucker!
That's the upshot of blogger Richard Belzer's analysis of the tax implications of giving back a bonus.
The good news is that the House bonus-confiscation bill specifically excludes "any amount if the employee irrevocably waives the employee's entitlement to such payment, or the employee returns such payment to the employer, before the close of the taxable year in which such payment is due," provided that the employee does not receive "any benefit from the employer in connection with the waiver or return of such payment."
That means you won't be taxed at 90% on the money you held only briefly. But you will be taxed. As Belzer explains:
All compensation, including the retention bonuses, received by employees for services is included in the recipient's gross income, and in determining his adjusted gross income (AGI). If a bonus recipient gives it back, does the bonus vanish from the employee's income?No. Because the recipient was entitled to receive the amount of the bonus, and actually received it, it cannot be excluded from gross income or AGI.This is true under existing law, irrespective of whether the House-passed bill is ever enacted. Belzer notes a couple of ways in which you may be able to reduce the tax on your relinquished bonus:
A recipient could donate all or a portion of the bonus to charity. The amount donated would be deductible on the employee's 2009 return to the extent it does not exceed 50% of his AGI (as increased by the amount of the bonus). Any excess may be carried over and deducted in the succeeding 5 years, always subject to the 50% limit.This may work if the law doesn't change, but the House bonus-confiscation bill makes no provision for deductions, so if it becomes law, a bonus donated to charity would still be taxable at 90%. Giving the money to charity instead of returning it to AIG would also seem to constitute a refusal of Cuomo's offer you can't refuse.
Belzer continues:
Another option may be to deduct the amount of the bonus returned to the employer as an unreimbursed business expense, incurred to avoid litigation or public disparagement that could harm the employee's current or future employability. Understandably, the instructions for IRS Form 2106 do not address a situation like this, and it is entirely possible that it has never previously occurred.Assuming that the IRS were to agree, then the employee would be able to deduct the portion of the bonus exceeding 2% of AGI (again, as increased by the amount of the bonus). The proportion of the bonus that would be deductible depends on the relative size of the bonus to total AGI. No matter the ratio, the employee's tax bill would go up in proportion to the size of the bonus even though he did not keep it.But wait. Because you're "rich," you don't get to deduct all your deductible income:
Regardless of whether a bonus recipient donates the money to charity, or claims a deduction for the return of the bonus, if his AGI in 2009 exceeds $166,800 (if single, or married and filing a joint return), his itemized deductions (other than for medical expenses, investment interest, and certain losses) are reduced by the lesser of (1) 3% of the difference between his AGI and $166,800, or (2) 80% of his otherwise allowable itemized deductions. For many bonus recipients, this will mean that a significant portion of the bonus is not deductible.And it's even worse than that. Belzer does not note that unreimbursed business expenses, while deductible from the ordinary income tax, are subject to the alternative minimum tax. Thus you will pay at least 26%, and probably 28%, of the bonus you no longer have in AMT.
Add it all up, and the cost of returning your bonus is somewhere north of 130%. Suddenly that 90% rate doesn't sound so bad.
Rahm Shelter
If the preceding item leaves you in despair this story from the Chicago Tribune should offer some hope:Before its portfolio of bad loans helped trigger the current housing crisis, mortgage giant Freddie Mac was the focus of a major accounting scandal that led to a management shake-up, huge fines and scalding condemnation of passive directors by a top federal regulator.One of those allegedly asleep-at-the-switch board members was Chicago's Rahm Emanuel--now chief of staff to President Barack Obama--who made at least $320,000 for a 14-month stint at Freddie Mac that required little effort.As gatekeeper to Obama, Emanuel now plays a critical role in addressing the nation's mortgage woes and fulfilling the administration's pledge to impose responsibility on the financial world.Emanuel's Freddie Mac involvement has been a prominent point on his political résumé, and his healthy payday from the firm has been no secret either. What is less known, however, is how little he apparently did for his money and how he benefited from the kind of cozy ties between Washington and Wall Street that have fueled the nation's current economic mess.There's a promising way of shielding your livelihood from demagogic and rapacious politicians: become one of them!
He Gets Results
• "Illegal Alien Bailout"--headline, LouDobbs.TV.CNN.com, Jan. 15
• "Feds' Plan to Poison Banks of Rio Grande Stalled"--headline, CNN.com, March 25
Too Undignified for Barney Frank
The Boston Herald reports on an amusing kerfuffle earlier this week on Capitol Hill:U.S. Rep. Barney Frank went after "Code Pink" protesters during a congressional hearing [Tuesday], telling the pink-clad activists to "act your age" and "grow up."Frank, chairman of the House Financial Services Committee, interrupted Treasury Secretary Tim Geithner during his testimony to upbraid the sign-waving lefty protesters, seated just a few rows behind government witnesses."Will you please act your age?" snapped Frank, a Newton Democrat. "If you have no greater powers of concentration, then you leave the room. We're trying to have a serious discussion. . . . We really need people to grow up."Frank repeated the performance when Fed chairman Ben Bernanke was testifying, lecturing the protesters: "I do not know how you think you could advance any cause to which you might be attached by this kind of silliness." Video is here.
The Herald adds, "Yesterday's confrontation was just the latest scrap between committee members and the 'Code Pink' protesters, who describe themselves as female peace and social activists, though one of them was a male yesterday." That characterization is awfully insensitive to the transgendrified.
The Polman Standard
Dick Polman of the Philadelphia Inquirer has been "cited by the Columbia Journalism Review as one of the nation's top political reporters" and "lauded by the ABC News political website as 'one of the finest political journalists of his generation,' " according to his bio on the Inquirer's Web site. All we can say is, we'd hate to see who didn't make the cut.OK, we can say more. Polman has a blog post on President Obama's Tuesday press conference, in which he makes this observation about the president's proposed energy taxes:
Naturally, the minority Republicans hate this idea; they also hate Obama's ambitious budget. House leader John Boehner fumed yesterday that "this may be the most irresponsible piece of legislation I've seen in my legislative career"--this, from a guy who, like virtually all his GOP brethren, heartily embraced George W. Bush's "WMD" Iraq war resolution. So we can basically dismiss the GOP's current complaints as the usual chump change.For the sake of argument, let's accept the premise that congressmen who voted in favor of the Iraq war were mistaken. It is a non sequitur to conclude from this that they are mistaken now about Obama's budget--unless one asserts a second premise, to wit: Congressmen who were mistaken about the Iraq war in 2002 are mistaken about the Obama budget now.
Well, look at the House and Senate votes on the Iraq resolution. Among those who voted in favor of it were the current vice president, the current secretary of state, the man who would have been secretary of health and human services had he paid his taxes on his limo, the current majority leaders of both House and Senate, and the current chairmen of the House Budget and Senate Finance committees. By Polman's logic, all of them must be mistaken on the Obama budget too.
One may object that we are being too rigorous in our analysis, that Polman is simply employing a bit of political hyperbole, not meant to be taken literally.
Very well, but what does it say about this fine, top political reporter that it is a defense to say he is engaging in partisan hackery?
His Current Job Isn't Challenging Enough?
"Obama Wants High-Paying, High-Skill Jobs in Future"--headline, Associated Press, March 26Reliable Sources
Here's a great one, from Sports Illustrated:A member of the NCAA's agents and amateurism staff contacted an official at the University of Connecticut on Wednesday morning to request that the university investigate allegations made in a Yahoo! Sports report that detailed potentially major violations and report its findings to the NCAA, an NCAA source told SI.com on Wednesday night.The source, who requested anonymity because the NCAA cannot officially comment about ongoing investigations, said the NCAA would not decide whether to launch its own investigation into the matter until receiving a report from the school.Not only has the NCAA not launched an investigation, it hasn't even decided to do so. Yet SI grants the source anonymity on the ground that this vaporous inquiry is "ongoing."
Homer Nods
Sen. Benjamin Cardin is sponsoring legislation that would allow nonprofit newspapers to sell advertising free of taxation, not free of "charge" as we absentmindedly wrote yesterday (since corrected).Life Imitates 'South Park'
• "Butters is sure he's seen a Vampire at school but he can't get anyone to listen to him. Meanwhile, the Goth Kids are angry and frustrated when the other kids can't tell the difference between a Goth and a Vampire."--episode description, "The Ungroundable," originally aired Nov. 19, 2008
• "A school administrator wants to set the record straight: There are no vampires at Boston Latin. The headmaster of the prestigious exam school took the unusual step today of sending a notice to faculty, students, and parents saying that 'rumors involving "vampires" ' had begun spreading through the building Wednesday, causing disruption and anxiety for a number of students."--Boston Globe, March 26, 2009
Maybe He Can Airlift Them Some Marmalade
• "Orange Man Appointed to Finance Commission of Texas"--headline, Beaumont Enterprise, March 24
• "N.D. City May Be Out of Jam"--headline, Denver Post, March 26
With Friends Like These . . .
"Police: 'Family Friend' Sexually Assaults, Burns Woman"--headline, WYFF-TV Web site (Greenville, S.C.), March 24And Though She's Not Really Ill
There's a Little Yellow Gill
"Study: Pharmaceuticals Found in Fish Across U.S."--headline, Associated Press, March 25Don't Worry, the Check Is in the Mail
"Postal Chief Says Post Office Running Out of Money"--headline, Associated Press, March 25And Tchaikovsky Was a No-Show at the Super Bowl
"Beethoven Likely to Miss Kentucky Derby"--headline, Lexington (Ky.) Herald-Leader, March 26Sounds Like He's Favoring the Wrong Leg
"Bulls' Luol Deng Leaning Against Surgery on Leg"--headline, Chicago Tribune, March 26Help Wanted
"Prostitution King Sought"--headline, Daily Breeze (Torrance, Calif.), March 24Everything Seemingly Is Spinning Out of Control
• "Hundreds of Killer Whales Seen in Gulf of Mexico"--headline, Associated Press, March 25
• "Teenager Paints Giant Phallus on Roof of Parents' Home"--headline, Daily Mail (London), March 24
• "Cupertino Ordinance Changes Leave Residents Fearing Wave of 'Monster Homes' "--headline, Cupertino (Calif.) Courier, March 25
• "Senate Reviewing How College Football Picks No. 1"--headline, Associated Press, March 25
News of the Tautological
"Unified Democrats Mirror Obama Budget Priorities"--headline, Associated Press, March 25Breaking News From 1929
"Cass County Man Critical After Crash"--headline, Kalamazoo (Mich.) Gazette, March 26News You Can Use
• "Need New Cartilage? Grow Your Own"--headline, Scotsman, March 25
• "When Economy Sours, a Tootsie Roll Can Sooth the Soul"--headline, New York Times, March 24
• "Marry, Eat Well, Exercise--Be Happy"--headline, Deseret News (Salt Lake City), March 25
Bottom Stories of the Day
• "Utah Won't Be Adding More Birth Centers"--headline, Salt Lake Tribune, March 26
• "Report: Britney Spears Is Moving to New Jersey"--headline, FoxNews.com, March 25
• "Cantor Watched Britney Spears Concert During Obama Presser; Landrieu Denies Rumors"--headline, Puffington Host, March 25
• "Panel on Bipartisanship Finds Little Common Ground"--headline, NationalJournal.com, March 25
Atomic Aging
On Aug. 6, 1945, the Associated Press reports, Tsutomu Yamaguchi was on a business trip in Hiroshima, Japan.Unfortunately, the U.S. dropped an atomic bomb on Hiroshima that day.
Fortunately, Yamaguchi survived and returned home.
Unfortunately, he lived in Nagasaki, where the U.S. dropped a second atomic bomb, on Aug. 9.
Fortunately, he survived that bombing too and has now been certified a survivor of both Hiroshima and Nagasaki, which entitles him to "compensation, including monthly allowances, free medical checkups and funeral costs."
Unfortunately, he may have to use that last benefit sooner than he would like, for he is 93.
Stay away from A-bomb explosions. If the blast or the radiation doesn't kill you, the superannuation will.
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(Carol Muller helps compile Best of the Web Today. Thanks to Bruce Gans, Dorothy Olson, Steve Pierce, Michael Williams, Yisrael Frenkel, Bruce Goldman, Dagny Billings, John Vecchione, Jason Roten, Jonathan Boyd, Nick Klein, Lee Coller, Anil Adyanthaya, Scott Davis, Tom Knight, Lindsay Osbon, Bryan Fischer, Evan Slatis, Mark Stuart, Doug Black, John Alder, Gregg Geil, Terry Holmes, Chris Green, Tino Rishmawy, John Sanders, Tim Willis, Kyle Kyllan, Jeff Jardine, Abel Keogh, Doug Jeffreys and John Williamson. If you have a tip, write us at [email protected], and please include the URL.)
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