90% Tax on Bailout Bonuses

The House just voted 328-93 to levy a 90% tax on bonuses for executives of any company getting more than $5 billion in bailout money from the government. It’s rather extraordinary that we’ve gotten to this point.

I can’t say I’m exactly “for” this bill, though I’m not exactly against it either. I share the sense of outrage that people who run a company into the ground can walk away with huge payouts. I actually joked a while back that the appropriate vengeance against these klepto-execs was to create a very high, targeted tax exactly like this– who knew anyone would actually have the guts to do it! But it just seems to have the potential to turn into a big ugly mess that won’t actually do much good.

However, I’m all for progressive taxation, and I think if we’d never rolled back the very highest marginal rates so much, we’d be in less of a mess in the first place. As I always like to remind people, we had extremely high marginal tax rates in the 1950s and it was not incompatible with booming economic growth. If there’s any lesson to be learned from recent months, it is that there will always be people whose greed and ambition knows no bounds. They may work their way to the top, or they may steal their way to the top, but they are dying to get there one way or another. Higher taxation won’t stop them from being productive, but it will help pay for protecting the rest of us from their excesses.

But geez, let’s go back to doing it in a nice, graduated way– what’s going on these days is enough to give you whiplash!

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