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March 19, 2009 at 08:00 PM
Washington
House members voted 328-93 Thursday to impose a 90% tax on bonuses paid to employees with family incomes above $250,000 at companies that have received at least $5 billion in government bailout money.
The House action was on a bill approved Wednesday by the House Ways and Means Committee.
The bill, H.R. 1586, was introduced by Ways and Means Chairman Charles Rangel, D-N.Y., in response to public and congressional anger over $165 million in bonuses paid last week to executives of American International Group Inc., New York.
In explaining how Ways and Means arrived at the 90% tax rate, Rangel said, ”We figured that the local and state governments would take care of the other 10%.”
The people have said, ‘No,’” Rep. Earl Pomeroy, D-N.D., shouted on the House floor. “In fact, they said, ‘Hell no, and give us our money back.’”
Pomeroy is a former North Dakota insurance commissioner.
H.R. 1596 would apply to bonuses paid since Jan. 1 by AIG or any other company that has accepted more than $5 billion in bailout money. The bill excludes commission payments, expense reimbursements and fringe benefits from the definition of “bonus.”
An employee affected by the bill could avoid the 90% tax by agreeing to waive the right to the bonus.
AIG paid the bonuses that sparked the fury to executives and former executives of its AIG Financial Products Corp. unit.
Problems with the credit default swaps and other arrangements the unit sold forced AIG to seek a federal bailout in September 2008.
AIG Chairman Edward Liddy testified Wednesday before a congressional hearing that some recipients of the payments already had returned the money, and that he was asking others to do so.
New York Attorney General Andrew Cuomo said this afternoon that he will take AIG to court if the company fails to comply by the end of the day with a subpoena seeking a list of the bonus recipients.
An AIG representative says the insurer will “respond appropriately” to Cuomo’s subpoena.
Links to the text of the bill and other information about it are available here.
The following is the text of the bill posted on the Library of Congress legislative Web site:
HR 1586 IH
111th CONGRESS
1st Session
H. R. 1586
To impose an additional tax on bonuses received from certain TARP recipients.
IN THE HOUSE OF REPRESENTATIVES
March 18, 2009
Mr. RANGEL (for himself, Mr. ISRAEL, Mr. PETERS, Mrs. MALONEY, Mr. STARK, Mr. LEVIN, Mr. LEWIS of Georgia, Mr. TANNER, Mr. POMEROY, Mr. THOMPSON of California, Mr. LARSON of Connecticut, Mr. BLUMENAUER, Mr. PASCRELL, Ms. BERKLEY, Mr. VAN HOLLEN, Mr. MEEK of Florida, Mr. DAVIS of Alabama, Mr. DAVIS of Illinois, Mr. ETHERIDGE, Ms. LINDA T. SANCHEZ of California, Mr. HIGGINS, Mr. YARMUTH, Mr. DINGELL, Mr. CONNOLLY of Virginia, Ms. FUDGE, Mr. LUJAN, Mr. MAFFEI, Mr. PERRIELLO, Mr. CARNEY, Ms. CASTOR of Florida, Ms. CLARKE, Mr. COHEN, Mr. ELLISON, Mr. HALL of New York, Mr. HARE, Mr. KLEIN of Florida, Mr. LOEBSACK, Ms. SCHAKOWSKY, Mr. SIRES, Mr. WELCH, Mr. WILSON of Ohio, Mr. WU, and Mr. HILL) introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To impose an additional tax on bonuses received from certain TARP recipients.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. BONUSES RECEIVED FROM CERTAIN TARP RECIPIENTS.
