Haste makes waste my grandmother used to say… When it comes to legislation haste often leads to unintended consequences. Take for example congresses rush to pass a 90 percent tax on the retention bonuses paid to executives at AIG (emphasis mine):
Lawmakers bellowed with outrage last week following revelations that AIG was paying millions in bonuses to employees at a rogue division based in suburban Connecticut.
But the bonus restrictions House members prescribed in response — a 90 percent tax on those bonuses — could have painful side effects for the subsidiaries of other bailed-out financial companies, including one located just a few miles away from the troubled AIG unit.
Phibro, a commodities trading company located in Westport, Conn., potentially could be hit with the 90 percent tax on bonuses since its parent company, Citigroup, has received $45 billion in bailout money.
Phibro, though, has not actually taken federal rescue funds and is considered a relatively stable and profitable subsidiary of Citigroup.
The subsidiary side effect is just one example of the complications the House-passed bill could create if such a measure clears the Senate and heads to President Obama’s desk.
U.S. Rep. Jim Himes, D-Conn., who represents the district where Phibro is based, said the bill is “undoubtedly replete with unintended consequences” — the product of what he called “hasty work.”
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But the Connecticut Democrat said he expects the Senate to work up an entirely different bill to address excessive bonuses. He said the House version was a “signal” to taxpayers that Congress is paying attention to the issue, but not a final product.
Excuse me??? With all due respect Congressman, we expect our elected leaders to act like adults. Not to run off half cocked and rush to pass a hastily crafted, unconstitutional Bill of Attainder to send a signal.