Bill Introduced To Tax Bailout-Related Bonuses

Mike wanted 100% tax rate, settled for 90%

Humboldt Sentinel
3/18/09
By Sentinel Staff

WASHINGTON -- The House Ways and Means Committee introduced a bill by Congressman Mike Thompson (D-Napa Valley) yesterday to charge a 90 percent tax for bonuses paid by businesses given rescue money from the government, such as AIG.

”It’s outrageous that some of the same bankers who helped create this economic mess are now going to be rewarded for their failures with taxpayer dollars,” said Congressman Thompson in a release on Tuesday. “By taxing all bonuses paid out by companies that received money to help them stay afloat, we’ll send a message to these folks that business as usual is no longer acceptable. I would prefer to tax these bonuses at 100 percent but that level is considered confiscatory and doesn’t pass legal muster.”

Currently the IRS keeps 25 percent of bonuses less than $1 million and 35 percent of bonuses more than $1 million dollars. Thompson’s bill, H.R. 1572, the “Taxpayer Protection Act,” raises the rate to 90 percent of bonuses paid by companies given bailout money through the Emergency Economic Stabilization Act of 2008.

“It goes against the ideals of capitalism to reward the people that helped create this economic mess,” stated Thompson yesterday. “It’s even more outrageous that taxpayers are footing the bill. Congress should quickly pass this legislation that will effectively eliminate the bonuses being paid out by companies who received help from the government.”

Thompson is a senior member of the Ways and Means Committee, which has jurisdiction over all tax-related matters coming before Congress. House leaders have indicated that passing legislation to address the bonuses will be a high priority for Congress this week.