House OKs Tax on Fat Bonuses for AIG, Other Bailed-Out Companies

House OKs Tax on Fat Bonuses for AIG, Other Bailed-Out Companies - 3-20-2009

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House OKs Tax on Fat Bonuses for AIG, Other Bailed-Out Companies
Tom Raum

The Associated Press. March 20, 2009
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EXCERPT: Denouncing a "squandering of the people's money," lawmakers voted decisively Thursday to impose a 90 percent tax on millions of dollars in employee bonuses paid by troubled insurance giant AIG and other bailed-out companies. In some cases the bonuses might be taxed 100 percent leaving the recipients with nothing. It was only this past weekend that the bailed-out insurance giant paid bonuses totaling $165 million to employees, including traders in the Financial Products unit that nearly brought about AIG's collapse. AIG has received $182.5 billion in federal bailout money and is now 80 percent government owned. Disclosure of the bonuses touched off a national firestorm that both the Obama administration and Congress have scurried to contain. The House vote was 328-93. Similar legislation has been introduced in the Senate and President Barack Obama quickly signaled general support for the concept. "I look forward to receiving a final product that will serve as a strong signal to the executives who run these firms that such compensation will not be tolerated," the president said in a statement. "We want our money back now for the taxpayers," said House Speaker Nancy Pelosi. "It isn't that complicated." Rep. Charles Rangel, a New York Democrat, chairman of the tax-writing House Ways and Means Committee, said he expected local and state governments to take the remaining 10 percent of the bonuses, nullifying the pay-outs. In a statement issued by the White House late Thursday, Obama said the House vote "rightly reflects the outrage that so many feel over the lavish bonuses that AIG provided its employees at the expense of the taxpayers who have kept this failed company afloat." "In the end, this is a symptom of a larger problem -- a bubble-and-bust economy that valued reckless speculation over responsibility and hard work," he said.

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