House Dems take on Wall Street BonusesJanuary 19, 2010 - by Eric Naing
The author, Eric Naing, is an intern with OpenCongress working from the Sunlight Foundation office. He previously reported on the Illinois State Legislature and served as an intern at The Nation. He’ll be a regular on the blog in the coming months and we’re happy to have him on our team.
Drawing upon the growing populist anger at Wall Street, two House Democrats have introduced dueling bills that seek to heavily tax over-sized bank bonuses.
Last Tuesday, Rep. Dennis Kucinich [D, OH] introduced the Responsible Bankers Act (H.R.4414). Kucinich’s bill would impose a 75% tax on what he calls “extraordinary” bonuses given to executives at Wall Street firms. In a press release, Kucinich said this bill would “not penalize banks for making a profit, but rather will tax the bonus pools that are set aside.”
Just a few days later on Thursday, Rep. Peter Welch [D, VT] introduced the similar Wall Street Bonus Tax Act (H.R.4426). Welch’s bill would impose a still sizable but less dramatic 50% tax on bank bonuses over $50,000. Unlike Kucinich’s bill, Welch’s tax would only affect banks that received bailout funds from the Troubled Asset Relief Program (TARP) signed into law by President Bush in October 2008. Revenue from this tax would go toward funding loans for small businesses.
Angry that the same Wall Street bankers who received TARP funds are set to once again dole out billions in bonuses this year, Welch believes his tax will help recoup some of those dollars back to taxpayers.
“Financial firms that received taxpayer assistance must remember that they owe their return to profitability to hardworking Americans,” said Welch at a press conference.
Both bills, sponsored by two liberal representatives, face an uphill battle in the House. However, Welsh’s bill currently garners more support with 18 sponsors versus the 9 sponsoring Kucinich’s bill.
Further demonstrating the potency of the issue of bank profits and bonuses, President Obama on Thursday announced his own 10-year, $90 billion bank tax proposal on banks with more than $50 billion in assets. While Obama has previously opposed taxes on bank bonuses, he believes his proposal would work in the same vein as Kucinich’s and Welch’s taxes. Ultimately, said Obama, the goal would be “to recover every single dime the American people are owed.”