A partner at the law firm Cadwalader yesterday issued a very unique client memo titled “2 Ideas In One Memo.” Tongue placed firmly in cheek, attorney Steven Lofchie describes a tax reform that would make it possible to clawback excess compensation from anyone we don’t like.
(Some background: Cadwalader was heavily involved in structured finance, particularly commercial mortgage-backed securities. It was named lawfirm of the year by Derivatives Week in 2007. Two of its biggest clients were Bear Stearns and Lehman Brothers. In recent years, they had also made a big push into private equity. Now all that business has blown up and Cadwalader is experiencing a catastrophic decline in its business.)
Some highlights from Lofchie’s memo:
- Anyways, the tax system is completely messed up. Why should people get paid $1MM to be a movie star and then pay no taxes plus get to choose between Angelina and Jennifer. I would completely be a movie star for free especially if it was something like Halloween 5, but actually scary.
- Can you just imagine next year, one Sunday morning, Alex Rodriguez, reading the New York Times, goes out in his bathrobe to pick up the newspapers, in his fuzzy Yankee Slippers and robe that he got either for free or at a big discount, and there is a tax lien on his ill- gotten McMansions in his mailbox. Because Alex somehow “forgot” to withhold to pay the taxes that Mr. Cuomo is going to impose on him for letting down the Yankees (who receive major funding from the City and can’t even make the playoffs paying 10 times more in salary and “bonuses”than Tampa Bay). You say Mr. A.G. Cuomo can not put a lien on Alex’s houses because the tax bill hasn’t been passed yet by our lame legislature. That is a lame excuse, kind of like Alex’s hitting in the big games in a Stadium built with taxpayer money (your taxpayer money and mine). If Alex isn’t gettinghimself prepared for the big tax bill, he needs to wake up and smell the coffee. (Maybe Madonna can brew him some.)
- Lastly, the salaries that these guys make at the bank is ridiculous. By way of comparison, take a gander at Miguel’s Unofficial Salary Cap Info for the New England Patriots. www.patscap.com. As the data (singular datum) clearly shows, for not even $500K, you can get someone to run down the field at about 30 MPH into other guys, who played Big Time College Football (“BTCF”), who are running upfield at about 30 MPH and weighing about 1400 lbs. per square inch (weight times velocity equals weight squared) and Bust the Wedge. Half those guys—on both sides—are playing with concussions and dead of brain damage and bad knees and busted appendixes at 50.
It’s the Law of the Jungle meets the Law of Supply and Demand. If I can get someone to bust the wedge against 4 BTCF for $500K, I can sure get someone to hand out toasters to deadbeats for a lot less than that.
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