President Obama has the right idea by capping the bonuses for the executives of the companies receiving bailout funds. $500,000 is a good limit. Enforcing it may be an issue but there are simple ways to ensure compliance. One would be "special performance bonus taxes" on bonuses over $500,000 for both the company and the employee.
The employee would have to pay 50% on every dollar over the $500,000 limit. This tax would be separate from income tax and non-refundable. The tax rate for the business would be 100% for each dollar over the limit and also non-refundable. Income generated from this tax would go directly to paying off the national debt.
Let's use a $6,000,000 bonus to a CEO for an example. A bonus of that size would generate $8,250,000 payment towards the national debt; $5,500,000 from the business and $2,750,000 from the CEO. Looking at past outrageous bonuses given by businesses applying for bailout funds, the national debt could be paid off in just a couple of years.
If the company can only afford a total of $6,000,000 in bonuses for that employee then they need to pay the employee $3,250,000 and a tax of $2,750,000. The employee would pay $1,375,000. This would still generate $4,125,000 for the national debt. It is simple, if a business firmly believes that someone has performed well enough to get an obscene bonus, then national debt should also benefit from this stellar performer.
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Showing posts with label bailout. Show all posts
Showing posts with label bailout. Show all posts
Thursday, February 5, 2009
Monday, January 19, 2009
Cost of Doing Business
It used to be that any company in business knew they would have standard expenses including bank fees and administrative costs. Nowadays these fees have been passed down to the consumer. If I pay my mortgage payment with a check over the phone, I have a service fee anywhere from $5 to $12 added to my payment. If I speak to a real person, there is another fee added in the $10 range. If I use a credit/debt card to make my payment, there is a different service fee applied.
I was taught that businesses normally covered these costs with the income their business generated. Now everything is an added fee. I can no longer walk into an office and pay my mortgage payment with cash, I have to use check, e-check or credit/debt card. All, of course, for a fee.
It seems that somewhere someone got the bright idea of passing these fees onto the consumers. There are way too many businesses "feeing" consumers into debt. It has come down to using any product or service includes a fee. Then they add another fee when you pay them.
Do any of these fees go pay higher wages to their employees? No, they go to help someone meet their goals for a bonus and/or promotion.
Where is my bonus or promotion from all these fees I pay? Am I suppose to feel good because Mr. Middle-management made quota and got a $10,000 bonus when I don't know if I'll be able to make next month's house payment? These are the same type of managers who are getting government bailouts. Applying fees didn't cover their greedy little hands well enough so now we, the tax-paying consumers, must hand them more money. I feel any company receiving bailout money should not be allow to charge us fees for every little business expense they occur. We have earned the right to "feeless" goods and services by allowing them to use our tax dollars to keep their businesses open.
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I was taught that businesses normally covered these costs with the income their business generated. Now everything is an added fee. I can no longer walk into an office and pay my mortgage payment with cash, I have to use check, e-check or credit/debt card. All, of course, for a fee.
It seems that somewhere someone got the bright idea of passing these fees onto the consumers. There are way too many businesses "feeing" consumers into debt. It has come down to using any product or service includes a fee. Then they add another fee when you pay them.
Do any of these fees go pay higher wages to their employees? No, they go to help someone meet their goals for a bonus and/or promotion.
Where is my bonus or promotion from all these fees I pay? Am I suppose to feel good because Mr. Middle-management made quota and got a $10,000 bonus when I don't know if I'll be able to make next month's house payment? These are the same type of managers who are getting government bailouts. Applying fees didn't cover their greedy little hands well enough so now we, the tax-paying consumers, must hand them more money. I feel any company receiving bailout money should not be allow to charge us fees for every little business expense they occur. We have earned the right to "feeless" goods and services by allowing them to use our tax dollars to keep their businesses open.
Read more...
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