- Days left
Taxpayers are rightfully outraged at the paying of bonuses to AIG executives, in light of the enormous bailout with taxpayer funds. But the last solution they should want to this problem is a huge tax levied against the recipients of the bonus money.

Sure, a massive income tax sounds good when it's happening to someone else. But what about if it was happening to you? If you think the average taxpayer can't become the victim of a massive money grab by politicians, you're wrong. Even this tax on AIG employees is hitting innocent parties.

How can that be? The tax bill passed by the House of Representatives by a vote of 328 to 93 imposes the income tax on families with income above $250,000 and wages from AIG. What about the family with one spouse working at AIG and another spouse at a separate company? If their income is over $250,000, they're going to be hit by this. Is it fair that the spouse's income (unrelated to AIG) is included in that $250,000 threshold? No, it's not.
But even worse is the basic principle of our government enacting a tax that takes away almost all of a taxpayer's income. When we allow this to happen once, we open the door for it to happen over and over again in the future. This is not the role of our government. We should not let them steal more and more money from taxpayers. And with the spending frenzy our government is in, the only way to pay for it is by taxing more. Where does it end? It doesn't. The taxes get higher and higher, and no taxpayer will be immune.

If there's a problem with how federal bailout funds are being spent, the answer is not to tax the individuals who have indirectly received some of the bailout money. The answer is to not do the bailouts in the first place. Any company that needs charity from the taxpayers to stay in business ought to fail. Let the free market work.

Yes, there would have been some pain from the failure of AIG. But it certainly can't be any worse than the pain being inflicted on future generations who will have to foot the bill for the trillions of dollars being given away to failing companies. Let's redirect our anger toward the proper parties: Our lawmakers who are recklessly spending our money on these ridiculous bailouts.

Forensic accountant Tracy Coenen investigates corporate fraud and consumer scams, and is the author of Expert Fraud Investigation and Essentials of Corporate Fraud.

Increase your money and finance knowledge from home

What is Inflation?

Why do prices go up?

View Course »

Managing your Portfolio

Keeping your portfolio and financial life fit!

View Course »

TurboTax Articles

Are You Exempt From Health Care Coverage?

The Affordable Care Act, or Obamacare, is an individual mandate that requires all eligible Americans to have some form of basic health coverage by 2014. Those without insurance will receive a penalty when they file their tax returns ? that is, unless they have an exemption. TurboTax's Exemption Check can help you find out whether or not you qualify for an exemption.

Essential Tax Forms for the Affordable Care Act

The Affordable Care Act (ACA), also referred to as Obamacare, affects how millions of Americans will prepare their taxes in the new year. The law now includes penalties for all who haven?t obtained health insurance -- and those penalties are expected to be paid at tax time. The ACA also provides tax credits to help people pay for insurance, and you can claim those credits when you file your taxes. The Internal Revenue Service (IRS) has introduced a number of tax forms to accommodate the ACA.

Mortgage Refinance Tax Deductions

When refinancing a mortgage to get a lower interest rate or obtain more favorable loan terms, you're really just taking out a new loan and using the money to pay off your existing home loan. In general, the same tax deductions are available when you're refinancing a mortgage as when you're taking out a mortgage to buy a home.

How to Determine if You Have Minimum Essential Coverage (MEC)

The Affordable Care Act, also known as Obamacare, requires most Americans to have health insurance that meets a government standard known as "minimum essential coverage," or MEC. Whether your insurance qualifies as MEC depends not on the plan itself, but on how you obtained your coverage.

Rental Property Deductions You Can Take at Tax Time

Rental property often offers larger deductions and tax benefits than most investments. Many of these are overlooked by landlords at tax time. This can make a difference in making a profit or losing money on your real estate venture. If you own a rental property, the IRS allows you to deduct expenses you pay for the upkeep and maintenance of the property, conserving and managing the property, and other expenses deemed necessary and associated with property rental.

Add a Comment

*0 / 3000 Character Maximum