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Should Hedge Fund $11.6 Billion Profits be Taxed 90 Percent?

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Message Bill Hare

A recent torrent of fury was unleashed among House members when it was discovered that bank executives in the face of a taxpayer bailout had received $165 million in bonuses on contracts signed prior to the deposit of taxpayer largesse into the banks' hands.

When angry House members passed by an overwhelming margin a measure seeking to counteract this result by taxing bonus recipients 90 percent, the issue of constitutionality was raised from some Republican circles and echoed by others within the media and legal communities.

Such an act in the view of those individuals was perceived as a punitive response by government and hence constituted a bill of attainder, a move thereby deemed to be unconstitutional.

Now, according to a New York Times March 25 article by Louise Story, "As major markets and economies careened downward last year, 25 top managers reaped a total of $11.6 billion in pay by trading above the pain in the markets, according to an annual ranking of top hedge fund earners by Institutional Investor's Alpha magazine, which comes out Wednesday."

This staggering figure stands out in Dickensian nineteenth century terms symbolic of the "two nations" the English novelist wrote about concerning his country. The point was graphically made in the Sir Carol Reed hit 1968 musical film hit "Oliver!" that was adapted from the Charles Dickens novel "Oliver Twist."

Nothing makes a point quite like graphic examples and the opening sequence from "Oliver!" accomplished it as young Oliver Twist, a hungry child orphanage resident, holds up his empty porridge bowl and requests "more" in a move seen as thoroughly impudent by his tight-fisted superior.

Carol Reed's camera then shifts to a smaller adjoining room in furnishing the starkest of contrasts. In the orphanage section we see shabbily dressed young boys looking scrawny and subsisting on small amounts of porridge.

The dining room of the orphanage's wealthy proprietors contains plush velvet wall covering. The men who occupy it are resplendently dressed with the finest in Savile Row tailoring and sport substantial paunches, indicative of the fact that they are not forced to beg for additional amounts of porridge in the manner of young Oliver Twist.

In fact, the lavish spread on the table of which they are liberally partaking tells the story, containing all the gourmet items that a wealthy Londoner could desire.

Even when the federal income tax reached a peak level of 91 percent in the late fifties socialist author and sociologist Michael Harrington was butily at work writing a future best seller called "The Other America." Published in 1962, it highlighted economic disparities that afflicted the U.S.A. in that period and prompted the launching of a "war on poverty."

Future president and then Senator John F. Kennedy was denounced by Richard Nixon in the 1960 presidential election after he had declared earlier in the year that "17 million people in America go to bed hungry each night."

When Kennedy stuck to his guns and defended a Senate study that provided this figure, President Dwight D. Eisenhower reached one of the low rhetorical points of his presidency by replying cynically, "I go to bed hungry. I'm on a diet."

We stand at a deeper and more dangerous crossroad in twenty-first century America. Homelessness is sharply increasing , as particularly noticed by those living in large cities. Many of these individuals suffer from mental health problems.

This is concurrently accompanied by increasing unemployment along with underemployment. Those who are working regularly find themselves treading more water than ever, putting in longer hours for fewer real dollars. Greater numbers find themselves unable to keep up with soaring medical costs while keeping their families fed and clothed.

In order to reverse this trend and thereby cut increases in crime that accompany economic struggle the tax code needs to be revised. In Scandinavian nations such as Denmark and Sweden living standards are increasing while they steadily decline in America.

Examine the national tax structures in those countries and it is learned that the citizens of those nations dole out higher percentages of their incomes in taxation.

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Began in the journalism field in hometown of Los Angeles. Started as Sports Editor and Movie Writer at Inglewood Daily News chain after working in sportswriting of high school events at the Los Angeles Examiner.

Received a bachelor's in (more...)
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