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House Approves 90% Bailout Bonus Tax

March 19, 2009 - by Donny Shaw

As you have probably heard, the House this afternoon passed a bill (H.R. 1586) to impose a 90 percent tax on bonuses to employees at financial institutions that has received bailout money. The bill would levy the tax on any bonuses from bailed out firms paid out in 2009 to individuals with incomes over $250,000.

The final vote, which required a 2/3rds majority for passage because it was considered under suspension, was 328-93, with 10 not voting. (click here for full details, how each Rep. voted). Eighty-seven Republicans and six Democrats voted against it. The dissenting Democrats were:

Rep. Melissa Bean [D, IL-8]
Rep. Larry Kissell [D, NC-8]
Rep. Michael McMahon [D, NY-13]
Rep. Walter Minnick [D, ID-1]
Rep. Harry Mitchell [D, AZ-5]
Rep. Victor Snyder [D, AR-2]

It’s an interesting position, a couple of these Dems do a lot of aisle crossing (Bean, Minnick), but the others are generally more rank and file, though from not-solidly-Democratic districts. I’m looking for statements from them on their votes, I’ll update this post when/if I find them.

On a slightly different beat, Sunlight Foundation’s Paul Blumenthal has a good take on today’s vote:

But why such a rush? The bill, introduced by Rep. Charlie Rangel (D-NY), yesterday, was available less than a day before lawmakers voted on it. Shouldn’t Congress – and the public – get more time to read the bill? After all, it was because Congress was in a hurry before that it got itself into such a mess in the first place.

The language that was taken out of the stimulus during conference negotiations that would have blocked the AIG bonuses may not have been taken out if that bill wasn’t rushed through so quickly. If there was time to notice that a change had been made freeing up CEOs at bailed-out banks to get huge taxpayer-funded bonuses, public opposition would have kept Congress from passing the bill.

The Senate will be taking up their own version of the bonus tax in the next couple of weeks. Senate Majority Leader Harry Reid (D-NV) tried this afternoon to pass it quickly, but Sen. Jon Kyl (R-AZ) objected. Congress Matters has posted a summary of the Senate version.

President Obama says he’s looking forward to getting the final bill and, presumably, signing it into law.

UPDATE: Here’s the Senate version of the bill that will be voted on soon:

S. 651 – Compensation Fairness Act of 2009

The bill would tax companies giving out bonuses since the beginning of 2009 at 35 percent, plus individuals receiving the bonuses at 35 percent. Unlike the House bill, it has no minimum income threshold.

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