Goldman Execs Lose Bonuses, State Loses Millions

[WriteDown]

Source: AP

NEW YORK (AP) -- Underscoring how closely the fates of Wall Street and New York are intertwined, Gov. David Paterson said Friday that a single moment in the financial crisis. The decision by Goldman Sachs executives to forgo bonuses, cost the state millions of dollars.

The executives complied with the urging of New York Attorney General Andrew Cuomo and others who said in November that major Wall Street companies benefiting from federal bailouts shouldn't pay out the usual huge bonuses to executives.

Paterson says it was the right thing to do, but the result is a further hit to the fiscal crisis of state government.

``Things could go even more south in a big hurry,'' Paterson told reporters.

Losing tax revenue from bonuses was a big hit to New York's finances because Wall Street taxes accounted for 30 percent of state revenue in the last fiscal quarter.....

Read more: http://www.wcbs880.com/pages/3530409.php?contentType=4&contentId=3243002

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30% of state revenue?!?!?! That is unbelievable. Shows how complicated an issue it is.

[Unsane]

1. That first sentence doesn't make any sense grammatically.

[Uben]

2. That's a drop in the bucket.....

...compared to the hit the U.S. treasury is going to take come income tax time. Taxes are going to be raised, and they will have to be raised big time to make up for the upcoming shortfall!

[WriteDown]

3. You can raise them....

but no one is making any money right now. No one is investing and no one is buying anything. Every dollar I'm making right now goes toward savings.

May be a drop in the bucket for you, but for the state of NY its a critical.

edited to combine posts.

[WriteDown]

4. self delete

repeat

[bluestateguy]

5. If not paying bonuses saves jobs of secretaries and file clerks then it's worth it

They spend money too, and that money goes into the economy too.

[madmom]

6. How much do they think the country will lose if

auto worker's jobs are left to die? How much do they pay in taxes income and other that won't be paid?

[tabasco]

7. Boohoohoohoohoo!!

:cry::cry::cry::cry::cry::cry::cry::cry::cry:

Those poor multi-millionaires and the poor, needy state government!!

(countdown to the idiotic trickle down screeching: 4 - 3 - 2 - 1)

[WriteDown]

8. Needy state government??

:shrug:

[gmudem]

9. About that "needy state government"

It's the thing that pays for Medicare, Medicaid, Welfare, Food Stamps, EDUCATION, and all kinds of silly things like that. I guess they're not too important though.

[Bozita]

10. I get it. The State of NY goes into the shitter unless Wall Streeters get bonuses from TARP.

Thank you.

Wall Street steps up to the plate to save the people of New York.

Patriotism like that brings tears to my eyes.

[hack89]

14. No - It means you can't build a tax structure that depends on so few people

if they stop paying than the entire state financial health goes down the shitter. It is hard balancing a pyramid on its point.

[customerserviceguy]

17. That's the way cigarette taxes work, too

If people quit smoking, then a sizable source of state revenue declines, too.

Now, I'm not a smoker, and never have been, but when you hitch your wagon to a particular horse, you will not get as far or as fast as if you had picked a more dependable horse. New York is like the bawdyhouses of the Old West, as long as the mine's producing gold ore, there will be partying, but when it's played out, the whole city is at risk of becoming a ghost town.

[JNelson6563]

23. That is what needs to be realized.

The tax code's structure needs to be re-structured..

Sadly Rush & Co. will convice those stupid enough to listen that this shows we need to give the wealthy a break cause they do so much for us. It will also be a point repeated by the countless talking heads on TeeVee.

Julie

[natrat]

11. maybe washington should bail out hedge funds next...fucking surreal all the corruption

[Sub Atomic]

18. Already done.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3653634

Fucking assholes.

[JerseygirlCT]

12. Shows how complicated, AND how very much those guys

get in bonuses!

Yikes.

[hack89]

15. It also shows the poor judgement on the part of the state. nt

[skooooo]

13. Eat the rich!

[Acadia Blue]

24. Ditto.

[Lucky Luciano]

16. Goldman paid about $16B in bonuses to roughly 30K employees

last year. This year, the bonus pool is about $10B...trouble for NY State is that not all of it is taxable. The maximum cash portion of the bonus is $400K...and employees will have a smaller cash payout...the rest is in the form of stock, which is not taxable until sold...which takes time as companies usually force their employees to vest their stock portions of their bonus. I am not sure how much of that $10B GS is paying in bonus comes in the form of cash, but my guess is that it is 25% or less in cash due to their preference for holding any bit of cash that it can these days...and from criticism over paying bonuses at all...no reason for them not to give bonuses in the form of stock though since it does not cost the company any cash and simply dilutes current shareholders (whom are mostly current/former employees anyway).

[lelgt60]

19. This line of argument is INSANE (or I am). Which is it?

On December 16, 2008, Goldman reported net earnings for the year 2008 (Nov 2007 thru Nov 2008) of $2.32 billion, including their 4th quarter loss. If they don't pay the bonuses ($178 million in STATE TAX for just 6 of them!!! What were they $500 million?), the money stays as profit and is taxed as corporate income. So the state still gets it, as well as the feds.

If they don't like the amount they get, just raise the corporate income tax, or pass a one time surcharge.

No?

[Blue_Tires]

20. eat the rich?

[Psephos]

22. It's the title of a book by P. J. O'Rourke. n/t

[MetaTrope]

21. I wonder how many hundreds of millions New York is handing out in tax incentives?

Maybe they should be looking at some smart budget cuts, rather than whining about a company not giving execs billions after laying off nearly a quarter of their work force...

[Lost-in-FL]

25. What is so bad about using money that was supposed to be given as exec. bonus...

back into a company to improve and create jobs ? Wouldn't that be better FOR EVERYONE than executives paying more state taxes?

[TomClash]

26. Most state tax money comes from the personal income tax

And that tax is high, expecially on the well-to-do. Some have been warning for years that NY relied too much on the Financial Services industry and now the chickens are coming home to roost.

[Lorien]

27. Not as high as it was before Bush

BushCo's tax policies must shoulder much of the blame for the drop in state tax revenue.

[WriteDown]

28. Perhaps some, but not really a factor

When you've laid off thousands and reduced cash bonuses by millions, a couple of percentage points don't mean much.

[Lorien]

31. A couple of percentage points on tens of millions means A LOT

when Jeb Bush slashed taxes for the super rich in Florida (and there are MANY here) state funds dried up in no time-and that was long before the shit hit the fan in the rest of the country.

Don't kid yourself; the billions cut from taxes on the wealthy make a big difference.

[TomClash]

29. Depends how it is calculated

But it is clear Bush's eceonomic policies were inferior - even to Clinton's.

[RUMMYisFROSTED]

30. Whoa! One of the first observed instances of trickle down.

But note that it's the state getting the trickle, not the individual.