Food for Thought: 90 Percent Income Tax Kills TARP Institutions

Congress is about to destroy its Troubled Asset Relief Program (TARP) investment in America’s major financial institutions.

-The most productive employees of these institutions make well in excess of $250,000 a year.

-Most of these employees have an actual or implied contract that permits them to make compensation in excess of $250,000 per year based on achieving certain goals.

-These employees ride up and down the elevator every day.

-These productive employees are in high demand by other institutions and boutique firms.

-If their income is capped, there is nothing to keep the best employees at Goldman Sachs, Morgan Stanley, Citibank, Bank of America and AIG.

-They will leave these TARP institutions where their income is capped and take up new employment in non-TARP institutions where they can earn well in excess of $250,000.

-Those remaining employees making less than $250,000 are the least productive employees and will not be able to make these financial institutions survive.

-The most important asset these TARP institutions have is this group of productive employees. Without these employees, their business will not survive.

-If the Senate passes the same 90 percent tax bill that the House passed, there will be a massive exodus of productive employees from these firms to non-TARP firms and the TARP institutions will fail.

-The American taxpayer can then thank the U.S. Congress and president for throwing away $750 million of TARP investment in these financial institutions because their judgment is clouded by envy.

-I suggest every American short these financial institutions so they can recover the future tax increases required to cover this lost investment.

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Tags American International Group Bank of America Business Citibank Citigroup Economy of New York City Economy of the United States Financial services Goldman Sachs Income tax Income tax in the United States Labor Primary dealers Troubled Asset Relief Program

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