Obama is the new Robin Hood

The war being waged against capitalism has taken an ugly turn.

The US House of Representatives, in a stunning move of ignorant populism, has passed a measure allowing the government to tax bonuses of executives that received federal bailout money at a rate of 90%. That’s nine-tenths–nine pieces of pizza out of a ten slice medium pizza. What’s perhaps more stunning is that it passed 328-93, which means that some of the rank and file Republicans have allowed themselves to be contaminated by our executive branch’s socialist agenda.

Let’s stop for a minute. Do I really think that the AIG executives deserved bonuses? The answer to this–it depends. If the company is contractually obligated to pay bonuses to employees, then either the company must pay them, or they must pay a penalty to break the contract (likely through some form of arbitration). If the company’s board of directors just says “Well, boys, we just snookered the government out of eleventy-billion dollars, let’s all buy yachts!” then I have a problem with it. However, passing legislation like this after the bailout money has already been released smacks of Darth Vader talking to Lando Calrissian in Empire Strikes Back. “Pray I don’t alter the deal any further…”

What really concerns me is an argument that I have made increasingly over the past several years through a Republican administration (Benito Bush) and the current administration (Fidel Obama). The government is taking too much on themselves. By creating a special tax that targets a very specific segment of the population, they are setting a legal precedent for seizing money and assets as they choose. How long until gun makers are charged with 90% taxes on their profits? What about media outlets that support conservative talk radio? Will the tax code be the new Sword of Damocles that is held over the heads of our financial community as a reminder that success could be punished with confiscation?

The Financial Times has an interesting article that talks about the potential ramifications of the 90% tax. I like this statement in particular:

“Finance is one of America’s great industries, and they’re destroying it,” said one banker at a firm that has accepted public money. “This happened out of haste and anger over AIG, but we’re not like AIG.” The banker added: “It’s like a McCarthy witch-hunt…This is the most profoundly anti- American thing I’ve ever seen.”

And here’s another quote:

Bankers at Deutsche Bank said it could benefit from the proposed legislation by poaching its US rivals’ most talented employees.

There is no question that we are creating an anti-business atmosphere that is going to further hamstring America’s ability to compete abroad. To see it stated so baldly by a competitive bank in the EU should be a wake-up call to what is awaiting us after eight years of Obamarama.