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Tax AIG bonuses at 100%

March 17, 2009 - by Donny Shaw

As David Waldman at CongressMatters points out, the scandal over executive bonuses at A.I.G. has set off a race to the hopper. The legislative solutions that’s picking up the most steam is Rep. Carolyn Maloney’s [D, NY-14] plan to levy a 100 percent tax on bonuses to AIG execs that are not related to a commission.

The bill’s not up on OpenCongress yet- we’ll update when it is. Here’s the text of a letter she sent around yesterday to members of the House:

Dear Colleague:


Like many of you, I was outraged to learn over the weekend that AIG is paying out another $165 million in bonus compensation. For a company that has required $170 billion in U.S. taxpayer assistance and is 80% owned by the United States Government, this is clearly unacceptable. That is why I will be introducing legislation that will instruct the Secretary of the Treasury and the Internal Revenue Service to develop guidelines that tax at 100% any bonus compensation that is not directly related to a commission for any recipient of TARP funds where the United States government is the majority owner of the company. This will allow AIG to continue to meet their “contractual obligation” to pay these bonuses, but will ensure that the recipients are not allowed to keep this money.


If you would like to cosponsor this legislation or if you have any questions, please do not hesitate to contact me or Edward Mills in my office at (202) 225-7944 or edward.mills@mail.house.gov.


Sincerely,


CAROLYN B. MALONEY


Member of Congress
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Comments

Anonymous 03/19/2009 5:03pm

what happened to large corporations being resonsible to thier stock holders and the public,when I hear the cnbc pudits rants for no regulation I think of how much the every day American has lost.Lets go back to corporate responsibility,responsible news casters and being our brothers keeper.laws that pertain equally to the theft by a poor or rich person

Anonymous 03/23/2009 11:53am

What is even more outrageous than the bonuses being paid is the fact that the government owns 80%of an American Corporation. When has the government ever run anything efficiently? Carolyn Moloney is a first class idiot!

hwaymich 03/19/2009 9:04am

Regardless of opinion about bonuses, this is deeply disturbing on a number of levels. 1) the bonuses were approved, with knowledge by Treasury, in the stimulus bill 2) If Congress can retroactively change position and apply it, there is nothing that can be relied upon in which case business is ripe for destruction; 3) Maloney stated on TV that “contracts can be broken by Congress”—so much for contract law 4) a tax of 100%, coupled with state taxes & payroll taxes (Medicare) penalize the recipients at more than the total received—it is beyond comprehension. These Reps and Senators are using this for grandstanding and it is both disgusting and frightening. Apparently Congress believes they can just abrogate all rights and contracts. I expect to hear a call for public lynching next.

Anonymous 03/19/2009 11:02am

This is unbelievable that what is essentially a room full of lawyers responsible for the laws of this country are ready to unilaterally ABUSE their power to abrogate the contract related to the bonuses. It is absolutely irrelevant as to whether the recipients deserve any money at all. The principal of the contract and the principal of law are being sacrificed for the sake of 15 second sound bites and TV posturing. Even if the members voting for this bill believe that it will ultimately not be applied, they should still be impeached for abuse of power.

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