Unintended Consequences

A while back, after the government bailed out financial firms like Goldman Sachs, it was announced that their CEO and six of their other top executives would forego receiving bonuses this year. Well, after running their company into the ground, most of us would say that they really didn't deserve bonuses, right? After all, a bonus should be earned by doing things that improve your company's profitability.

But now, we learn that there are some negative unintended consequences from those fat cats not getting even fatter: New York state is anticipating a tax shortfall of $178 million dollars that they would have received from the taxes on those bonuses that those executives didn't get. Which means, of course, that they'll have to raise taxes and fees on the rest of the people in New York to make up for the shortfall, at least if they want to keep their funding for various programs at the same level.

$178 million is a lot of coin, especially as the taxes from just seven guys' projected bonuses. How big would the bonuses have to be to have generated that much in taxes? We're talking about some serious ill-gotten gains. If they've been giving these guys this kind of money in bonuses every year, no wonder their companies have gone into the crapper.