Max Baucus and Chuck Grassley have released the first draft of their proposal to discourage "excessive compensation" at companies that have taken taxpayer money. Companies will face an excise tax of 35 percent on retention bonuses and bonuses over $50,000. Individuals will face the same. Deferred compensation is capped at $1 million and heavily taxed beyond that. It's not bad, but I'm not sure why they didn't set the rate at 100 percent. Why not shut this thing down entirely -- at least for the time being? Presumably, tax rates chewing through a majority of an individual's bonus will end the employment of anyone who was sticking around simply to receive their retention bonus. And if you're already courting a talent drain, then at least score the full set of political points for totally negating the practices that have so infuriated taxpayers. Full memo after the jump.
