Democracy Soup

Making sense out of the world of politics

AIG poster boy wants tax deduction for his ‘bonus’ but it’s our money he’s spending

leave a comment »

Originally published on on Fri, 03/27/2009 – 1:38pm

Is Jake DeSantis an economic hero?

Well, the executive in AIG’s financial-products division who sent in his resignation letter to The New York Times did receive a standing ovation from his colleagues. This included his boss, who has been seen in a Che Guevara T-shirt. After all, they might have thought, “here was someone who stood up when the bad, evil people tried to take away our million-dollar bonuses even though they were based on transactions we couldn’t back up. Who cares if taxpayer money paid for my bonus, it’s mine.”

But to whom does the bonus money belong? Of all the possible parties, the least likely answer is Jake DeSantis.

Of course, possession is 9/10 of the law, and DeSantis does have his bonus money. But it’s not really his.

We, the taxpayers, bailed out his company. We own 80% of his company, and it would have been more except Republicans cried out that nationalization would be bad, as opposed to this sewer we’re swimming in now. Oh, and the bonus is likely based on transactions with no financial backing.

But DeSantis wants to be “fair” about it, since we are giving him and his co-workers grief. DeSantis is willing to donate the after-tax proceeds, all $742,006.40 of it.

That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.

On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.

Doesn’t this sound like the end of a Jimmy Stewart movie? Not quite.

He doesn’t want it to “disappear back into the obscurity of A.I.G.’s or the federal government’s budget.” Now I’m no tax expert, but let’s say his bonus, pre-tax, is about $1.1 million, maybe $1.2 million. What could that kind of money be used toward in the federal government’s budget? It would be half a drop in the overall budget, but it could mean the construction of a crumbling school or extra money toward scientific research or rehabbing a veterans’ hospital. You know, the obscure parts of the federal government’s budget.

But perhaps you say that DeSantis might donate it to some worthy cause. After all, he promised to give us a list of all recipients once the money is donated. And you can always trust an AIG employee, can’t you?

Let’s assume that DeSantis is straightforward, and will do exactly as he said. This is, after all, similar to politicians, when caught getting a campaign contribution from some apparent nefarious source, promising to give the money to charity. But why do they get to pick the charity?

Our tax system offers tax breaks for those who give to charity. So even when a politician stumbles upon this situation, or in DeSantis’ case, they do benefit financially.

DeSantis makes it clear that “this is not a tax-deduction gimmick.” But it is. Never having made a $742,006.40 charitable deduction (but only because everything I have ever made and all my possessions add up to less than $742,006.40), I don’t know how much tax savings one can get, but I’m sure it’s a lot.

“I simply believe that I at least deserve to dictate how my earnings are spent,” said DeSantis. Well, let’s make him this deal: if he can convince us how he “earned” this money, we should consider letting him have the tax deduction. If he can write as many words about how his skills and talents allowed him to make this money legitimately as he did in whining about how unfair all of this is, we might be inclined to see things his way.

DeSantis wrote his letter to The New York Times, hoping for sympathy for his plight. When the financial world is crumbling all around us, when dreams and lives are literally shattered thanks to the exploits of those that worked in his company, he is looking in the wrong spot. If he really insists on donating our money in his “bonus,” there are plenty of people who really need his help, thanks to the efforts of AIG and other companies.


Written by democracysoup

March 27, 2009 at 1:38 pm

Posted in Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: