Obama Shoots Down 90% Tax Bracket
CNN reports about Obama's interview on 60 Minutes regarding a House bill that would tax bonuses at 90%:
The president also stressed that his administration won't endorse a House bill that would levy a 90 percent tax on bonuses paid out by companies that receive bailout money.
As a general proposition, you don't want to be passing laws that are just targeting a handful of individuals," Obama said. "You want to pass laws that have some broad applicability … you certainly don't want to use the tax code to punish people."
Smart. Sure the AIG "$167 million bonus gang" deserve it but tax code is a blunt instrument not to be used lightly. Attempting to use it against a particular person (or "random" handful of people is not a good idea). It's as if I were to use a 747 for my daily commute to the office 5 miles away. By way of example, a former board member of mine who was a White House fellow and worked for the Commissioner of the IRS for a year told me a really funny story about how the Commissioner tried to go after taking Hollywood stars who get Oscar gift bags only to watch George Clooney donate his bag and take the write off!
Nate Silver at FiveThirtyEight explains why it's a bad idea in pointing out that a secretary who makes $50K per year and who works 70-hours per week to get a $5K bonus at the end of the year is taxed at 90% (if her husband, for example, happens to make $200K per year).
I do think it is funny that there are now 328 Congresspeople (including 85 Republicans) on record supporting a 90% tax bracket! We'll see how that goes over in 4, er 2, years.