No pay over $250k for all TARP recipient bank employees!
Started by Special_K
almost 17 years ago
Posts: 638
Member since: Aug 2008
Discussion about
Started this on another thread but it was not showing up for some reason. Anyways, I was mistaken earlier, it had not passed as of this morning, but just passed now. Supposedly the Senate version has an incremental 35% tax on individuals (for top 70% marginal federal rate) plus a 35% tax on companies. ----------------------------------------------------------------- House Passes 90% Tax on... [more]
Started this on another thread but it was not showing up for some reason. Anyways, I was mistaken earlier, it had not passed as of this morning, but just passed now. Supposedly the Senate version has an incremental 35% tax on individuals (for top 70% marginal federal rate) plus a 35% tax on companies.
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House Passes 90% Tax on Employee Bonuses at Bailout Recipients
By Ryan J. Donmoyer
March 19 (Bloomberg) -- The U.S. House, moving swiftly in
response to public outrage, voted to impose a 90 percent tax on
employee bonuses at American International Group Inc. and other
companies getting at least $5 billion in taxpayer bailout funds.
The 328-93 vote cleared a two-thirds vote hurdle amid a
national furor over $165 million in bonuses paid last week by
AIG after it received $173 billion in federal bailout funds. The
measure would cover 75 percent of companies that receive federal
bailout funds, according to the House Ways and Means Committee.
“These people are getting away with murder,” said Ways
and Means Chairman Charles Rangel of New York. “They’re getting
paid for the destruction they’ve caused to our communities.”
The 90 percent tax would apply to people with overall
income exceeding $250,000, including bonuses. The tax would
apply to bonus payments made after Dec. 31, 2008, and it would
cease when the U.S. government’s investment in the company fell
below $5 billion. The tax wouldn’t apply to any bonus returned
to a company.
[less]
Response by Special_K
almost 17 years ago
Posts: 638
Member since: Aug 2008
Original story earlier
--------------------------------------------------------------------------------------
House to Vote on 90 Percent Tax on Executive Bonuses (Update3)
By Ryan J. Donmoyer and Christopher Stern
March 19 (Bloomberg) -- U.S. House Democratic leaders plan
to vote today on a proposed 90 percent tax on executive bonus
payments by companies receiving more than $5 billion in federal
bailout funds.
The bill is a response to the national furor that erupted
this week when it was learned that American International Group
Inc. paid $165 million in bonuses to employees, including many
in the financial products unit whose investments brought the
company to the brink of bankruptcy.
“These people are getting away with murder,” Ways and
Means Chairman Charles Rangel of New York said during floor
debate. “They’re getting paid for the destruction they’ve caused
to our communities.” The House plans to vote under a fast-track
procedure requiring approval from two-thirds of those voting.
Companies covered by the legislation have received 75
percent of federal bailout funds, according to the House Ways
and Means Committee.
House Republican Leader John Boehner of Ohio denounced the
Democrats’ bill as a “sham” effort to recover the money and
said, “We don’t want 90 percent of it back, we want all of it
back.” He said Republicans offered an alternative requiring the
Treasury secretary to devise a plan within two weeks to get all
the bonus money back.
Repay Half
The bill was drafted yesterday as AIG Chief Executive
Officer Edward Liddy told a House Financial Services
subcommittee that he asked employees who got bonuses over
$100,000 to repay half. AIG so far has received $173 billion in
federal bailout funds.
The 90 percent tax would apply to people with overall
income exceeding $250,000, including bonuses. The tax would
apply to bonus payments made after Dec. 31, 2008, and it would
cease when the U.S. government’s investment in the company fell
below $5 billion. The tax wouldn’t apply to any bonus returned
to a company.
“We just want to recover the taxpayers’ money for them,”
said Democratic Representative Steve Israel of New York. Those
who got the bonuses “are just going to have to tighten their
belts just like the rest of America,” he said.
The legislation wouldn’t attempt to impose the tax on
foreign employees of companies such as AIG, said Ways and Means
Committee spokesman Matthew Beck. Many of AIG’s bonus recipients
work in the London office of the credit-default swap unit.
Senate Proposal
The Senate is writing its own measure that would impose a
70 percent excise tax on the bonuses, split between the company
and employee. That tax would be collected from foreign workers
by making the company responsible for paying the employee’s 35
percent excise tax if the levy couldn’t be collected using
normal withholding in place under existing tax treaties,
according to a description released by the Senate Finance
Committee.
The Senate has not yet set a date for taking up its version
of the legislation.
Senate Finance Committee Chairman Max Baucus, a Montana
Democrat, and Senator Chuck Grassley of Iowa, the panel’s
ranking Republican, said they sent a letter asking Liddy to
identify who got bonuses from AIG, how long they worked for the
company and whether they are still employed by it. They also
asked Liddy for legal opinions on the risk AIG faced of being
sued if it hadn’t paid the bonuses.
Congress is acting after Treasury Secretary Timothy
Geithner said in a letter to lawmakers that his department’s
lawyers determined it would be “legally difficult” to prevent
AIG from paying the bonuses because they were required by
contracts.
No ‘License to Steal’
“We passed a recovery act, we did not pass a license to
steal,” New York Representative Steve Israel, a Democrat, said
at the news conference. “The middle class will no longer
subsidize pay for failure.”
Asked how lawmakers reached the 90 percent figure, Rangel
said, “We figure the local and state governments will take care
of the other 10 percent."
Liddy said in his congressional testimony yesterday that he
never would have approved the compensation contracts, which were
signed before he took over at AIG last year, and said he asked
employees to “do the right thing” on their bonuses.
AIG also budgeted $57 million in “retention” pay for
employees who will be dismissed, according to a March 2 filing
to the Securities and Exchange Commission.
Bonuses Expected
The inspector general for the Troubled Asset Relief Program
said today President George W. Bush’s administration expected
that bonuses would be paid at AIG in its November agreement to
provide bailout funds to the insurer.
The TARP contract between AIG and Treasury “specifically
contemplated the payment of bonuses and retention payments to
AIG employees, including AIG’s senior partners,” Neil Barofsky
testified before a House Ways and Means oversight panel.
The political heat generated by the AIG bonuses indicates
declining public and congressional support for shoring up
beleaguered financial institutions with government funds and may
make it tougher for President Barack Obama’s administration to
win approval for future bailouts.
The bonus decision “may jeopardize our ability to get the
majority of this Congress to support further largess, to provide
funds, to prevent a recession, depression or meltdown,”
Representative Paul Kanjorski, a Pennsylvania Democrat who heads
the capital markets subcommittee, told Liddy at yesterday’s
hearing.
Republicans have criticized Democrats for tacitly allowing
AIG to pay the bonuses due to language in a $787 billion
economic stimulus bill that became law last month. The law, in
effect, allows bonus arrangements at companies receiving
taxpayer bailouts as long as the bonuses were in place before
Feb. 11.
Original story earlier
--------------------------------------------------------------------------------------
House to Vote on 90 Percent Tax on Executive Bonuses (Update3)
By Ryan J. Donmoyer and Christopher Stern
March 19 (Bloomberg) -- U.S. House Democratic leaders plan
to vote today on a proposed 90 percent tax on executive bonus
payments by companies receiving more than $5 billion in federal
bailout funds.
The bill is a response to the national furor that erupted
this week when it was learned that American International Group
Inc. paid $165 million in bonuses to employees, including many
in the financial products unit whose investments brought the
company to the brink of bankruptcy.
“These people are getting away with murder,” Ways and
Means Chairman Charles Rangel of New York said during floor
debate. “They’re getting paid for the destruction they’ve caused
to our communities.” The House plans to vote under a fast-track
procedure requiring approval from two-thirds of those voting.
Companies covered by the legislation have received 75
percent of federal bailout funds, according to the House Ways
and Means Committee.
House Republican Leader John Boehner of Ohio denounced the
Democrats’ bill as a “sham” effort to recover the money and
said, “We don’t want 90 percent of it back, we want all of it
back.” He said Republicans offered an alternative requiring the
Treasury secretary to devise a plan within two weeks to get all
the bonus money back.
Repay Half
The bill was drafted yesterday as AIG Chief Executive
Officer Edward Liddy told a House Financial Services
subcommittee that he asked employees who got bonuses over
$100,000 to repay half. AIG so far has received $173 billion in
federal bailout funds.
The 90 percent tax would apply to people with overall
income exceeding $250,000, including bonuses. The tax would
apply to bonus payments made after Dec. 31, 2008, and it would
cease when the U.S. government’s investment in the company fell
below $5 billion. The tax wouldn’t apply to any bonus returned
to a company.
“We just want to recover the taxpayers’ money for them,”
said Democratic Representative Steve Israel of New York. Those
who got the bonuses “are just going to have to tighten their
belts just like the rest of America,” he said.
The legislation wouldn’t attempt to impose the tax on
foreign employees of companies such as AIG, said Ways and Means
Committee spokesman Matthew Beck. Many of AIG’s bonus recipients
work in the London office of the credit-default swap unit.
Senate Proposal
The Senate is writing its own measure that would impose a
70 percent excise tax on the bonuses, split between the company
and employee. That tax would be collected from foreign workers
by making the company responsible for paying the employee’s 35
percent excise tax if the levy couldn’t be collected using
normal withholding in place under existing tax treaties,
according to a description released by the Senate Finance
Committee.
The Senate has not yet set a date for taking up its version
of the legislation.
Senate Finance Committee Chairman Max Baucus, a Montana
Democrat, and Senator Chuck Grassley of Iowa, the panel’s
ranking Republican, said they sent a letter asking Liddy to
identify who got bonuses from AIG, how long they worked for the
company and whether they are still employed by it. They also
asked Liddy for legal opinions on the risk AIG faced of being
sued if it hadn’t paid the bonuses.
Congress is acting after Treasury Secretary Timothy
Geithner said in a letter to lawmakers that his department’s
lawyers determined it would be “legally difficult” to prevent
AIG from paying the bonuses because they were required by
contracts.
No ‘License to Steal’
“We passed a recovery act, we did not pass a license to
steal,” New York Representative Steve Israel, a Democrat, said
at the news conference. “The middle class will no longer
subsidize pay for failure.”
Asked how lawmakers reached the 90 percent figure, Rangel
said, “We figure the local and state governments will take care
of the other 10 percent."
Liddy said in his congressional testimony yesterday that he
never would have approved the compensation contracts, which were
signed before he took over at AIG last year, and said he asked
employees to “do the right thing” on their bonuses.
AIG also budgeted $57 million in “retention” pay for
employees who will be dismissed, according to a March 2 filing
to the Securities and Exchange Commission.
Bonuses Expected
The inspector general for the Troubled Asset Relief Program
said today President George W. Bush’s administration expected
that bonuses would be paid at AIG in its November agreement to
provide bailout funds to the insurer.
The TARP contract between AIG and Treasury “specifically
contemplated the payment of bonuses and retention payments to
AIG employees, including AIG’s senior partners,” Neil Barofsky
testified before a House Ways and Means oversight panel.
The political heat generated by the AIG bonuses indicates
declining public and congressional support for shoring up
beleaguered financial institutions with government funds and may
make it tougher for President Barack Obama’s administration to
win approval for future bailouts.
The bonus decision “may jeopardize our ability to get the
majority of this Congress to support further largess, to provide
funds, to prevent a recession, depression or meltdown,”
Representative Paul Kanjorski, a Pennsylvania Democrat who heads
the capital markets subcommittee, told Liddy at yesterday’s
hearing.
Republicans have criticized Democrats for tacitly allowing
AIG to pay the bonuses due to language in a $787 billion
economic stimulus bill that became law last month. The law, in
effect, allows bonus arrangements at companies receiving
taxpayer bailouts as long as the bonuses were in place before
Feb. 11.
I think the house just passed this...328-93.
http://cnnwire.blogs.cnn.com/2009/03/19/house-passes-bill-taxing-wall-street-bonuses/
its against the law.......this isnt the ussr!
How is this against the law. Doesn't the congress have the right to make the laws.
Yeah, the president will sign and supreme court will refuse to intervene, lest setting potential precedent to overturn taxation for everyone.
demand for apartments over $1.5mm is just going to crater. And that will have a ripple effect all the way down the price chain to studios.