House to vote on bill to tax TARP bonuses at 90%
Legislation targets $165 million in bonuses for traders at troubled AIG [
link to www.marketwatch.com]
WASHINGTON (MarketWatch) -- House lawmakers are scheduled to vote Thursday on a massive tax bill tailored toward bonuses to highly paid individuals at companies receiving bank bailout funds -- the next chapter in the controversy surrounding $165 million in payouts going to executives and other workers at troubled American International Group Inc.
The lower chamber's set to vote on legislation that would subject employees of companies receiving more than $5 billion of government funds to a 90% tax on bonuses, according to the House Democratic cloak room.
The vote comes a day after AIG Chairman and CEO Edward Liddy told lawmakers on Capitol Hill that some bonus recipients at the insurer plan to return the money while others have already done so.
AIG has received $173 billion in U.S. bailout funds. The AIG bonuses went out to traders in credit default swap insurance products and other derivatives contracts.
During hours of contentious testimony, Liddy told a House committee that he asked executives at AIG receiving bonuses greater than $100,000, to return half of the money they received. See full story.
However, the legislation targets more than just AIG bonuses: It would limit bonuses given to all executives at roughly a dozen financial institutions including Bank of America Corp. and Citigroup Inc. receiving money from the $700 billion bank-bailout fund, known as the Troubled Asset Relief Program, enacted in October.
The legislation was introduced by House Ways and Means Chairman Charles Rangel, D-N.Y.
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