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REGION: North America
TOPIC: Politics
Online NewsHour
UPDATE Posted: March 19, 2009, 10:30 AM ET   

House OKs Hefty Tax on AIG Bonuses

One day after American International Group Chairman Edward Liddy testified before angry lawmakers on Capitol Hill about company bonuses, the House of Representatives has approved a bill that would impose a 90 percent tax on big employee bonuses from firms bailed out by taxpayers.
House of Representatives building
The vote was 328-93. In all, 243 Democrats and 85 Republicans voted "yes" on the bill. It was opposed by six Democrats and 87 Republicans, the Associated Press reported.

"We want our money back and we want our money back now for the taxpayers," said House Speaker Nancy Pelosi, D-Calif.

The Senate is expected to consider a similar measure as early as next week, according ot the New York Times.

Minority Leader John Boehner, R-Ohio, said the bill was "a political circus" diverting attention from why the Obama administration hadn't done more to block the bonuses before they were paid, reported the Associated Press.

The bonuses, totaling $165 million, were paid to 4,600 employees of troubled insurer AIG, including to traders in the unit that nearly brought about the company's collapse. Taxpayer-funded bailouts totaled $173 billion for AIG.

Rep. Charles Rangel, D- N.Y., who chairs the House Ways and Means Committee, said Wednesday the tax would hit employees making more than $250,000 a year at companies receiving at least $5 billion in bailout money. Community banks and other smaller companies that have received bailout money would be excluded.

"I expect it to pass in overwhelmingly bipartisan fashion," House Majority Leader Steny Hoyer, D-Md., said Wednesday before the vote.

The legislation would cover 75 percent of companies that receive federal bailout funds, according to the House Ways and Means Committee.

"The American people are very upset about what they have heard about bonuses being paid by institutions which received taxpayer funds," Pelosi told reporters Wednesday.

Liddy told a House Financial Services subcommittee Wednesday that he asked employees who got bonuses over $100,000 to repay at least half.

Meanwhile, the AP reported Thursday that 13 firms receiving billions of dollars in federal bailout money owe a total of more than $220 million in unpaid federal taxes.

Rep. John Lewis, D-Ga., chairman of a House subcommittee overseeing the federal bailout, said two firms owe more than $100 million apiece. The House Ways and Means subcommittee on oversight discovered the delinquent taxes in a review of tax records from 23 of the firms, Lewis said in remarks prepared for a hearing, reported the AP.
Banks and other firms receiving federal money were required to sign contracts stating they had no unpaid taxes, Lewis said. But the Treasury Department did not ask them to turn over their tax records, he said.

The revelation is sure to spark more anger on Capitol Hill. To date, the Troubled Asset Relief Program (TARP) has paid out more than $300 billion to private companies, with billions more on the way.


---- Compiled from wire reports and other media sources

ONLINE NEWSHOUR LINKS

March 18, 2009
Outcry Over AIG May Pose Challenge to Obama's Agenda


March 18, 2009
AIG Chairman Liddy Face Lawmakers Amid Furor Over Bonus Pay


March 17, 2009
Calls Intensify on Capitol Hill to Recover AIG Bonuses


January 30, 2009
Backlash Continues Over Billions Paid in Wall Street Bonuses in 2008




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