US Senators Seek Wall Street Bonus Tax
Tuesday, February 9, 2010
US Senators Barbara Boxer and Jim Webb have proposed legislation that would
impose a tax on large bonuses paid by Wall Street banks and other firms that
benefited from billions of dollars of taxpayer assistance in 2009.
Commenting upon the introduction of the Taxpayer Fairness Act on February 4,
Boxer, a Democrat representing California, said: “To avert a financial
collapse, taxpayers saved ‘too big to fail’ companies. It is outrageous
that these companies are now doling out millions of dollars in bonuses while
the rest of America feels the pain of their reckless decisions."
The bill levies a 50% tax on bonuses in excess of USD400,000 paid by firms
that took USD5bn or more in funds from the Troubled Asset Relief Program (TARP).
Webb, a Virginia Democrat, insisted that the proposals have nothing to do with
“This is not something that’s going to run the gamut of all executive
compensation and bonuses. This is a one shot deal. This is a tax on excessive
bonuses of TARP recipients that received more than USD5bn from the American
taxpayer in 2009," he said.
“The Financial Times, a paper dedicated to the free market, editorialized
in favor of this position at the end of last year,” continued Webb. “We
believe this is a fair and reasonable approach. It offers equity and a level
of fairness to the American taxpayers who bailed these companies out.”
The Senators said that only bonuses received in 2009 would be affected by the
legislation. They intend that the revenues generated from the tax would be used
to reduce the federal deficit or "to help the nation recover from the recession."
The bill was introduced amid reports that Wall Street firms that benefited
from taxpayer support paid significant bonuses in 2009.