Bill would tax bonus cash
Democratic leaders to introduce legislation to tax bonuses from companies getting $5 billion or more in government bailout funds.
WASHINGTON (CNN) -- House Democratic leaders said they would introduce legislation Wednesday night to try to recoup bonuses paid to Wall Street executives with taxpayer money.
The measure would tax individuals on any bonuses they receive from companies getting $5 billion or more in TARP money. Bonuses for people with incomes over $250,000 would be taxed at a 90% rate. It affects bonuses received after Jan. 1, and applies not only to employees but former employees as well.
"We can't have any concept of we're getting even, but we must have a concept that we're trying to show that Congress ... can not tolerate that," said Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee.
Referring to the AIG executives who received bonuses, Rangel said, "I don't think these are the type of people to [whom you can] make an appeal to equity and justice. I don't think they really know the difference. I don't really think they've had life experience to allow them to believe the pain that they've caused for millions of Americans."
House Speaker Nancy Pelosi, D-Calif., said the bill would come up for a vote on Thursday.
"We must ... protect the American taxpayer from executives who would use their companies' second chances as opportunities for private gain," Pelosi said. "Because they could not use sound judgment in the use of taxpayer funds, these AIG executives will pay the Treasury in the form of this tax."
A similar proposal in the Senate would attempt to recoup bonuses by taxing both individuals and companies, but Rangel said House leaders decided against penalizing companies because they could simply ask for more taxpayer money.