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Congress looking at huge taxes on AIG bonuses
Associated Press
Issue date: 3/17/09 Section: News
WASHINGTON (AP) - Congressional Democrats vowed Tuesday to all but strip AIG executives of their $165 million in bonuses as expressions of outrage swelled in Congress over eye-catching extra income for employees of a firm that has received billions in taxpayer bailout funds.
"Recipients of these bonuses will not be able to keep all of their money," declared Senate Majority Leader Harry Reid, in an unusually strong threat delivered on the Senate floor.
"If you don't return it on your own we will do it for you," said Chuck Schumer of New York.
The bonuses were paid legally, part of a program that had been disclosed in advance in filings that American International Group Inc. made with the government.
House and Senate Democrats were crafting separate bills to tax up to 100 percent of generous bonuses awarded by companies rescued by taxpayer money. Republicans said President Barack Obama's administration should have done more to stop the bonuses.
AIG would not be the only firm named by either Democratic bill, but there was no question whose executives inspired the legislation.
"They're not going to get the financial benefit of those bonuses," said Senate Finance Committee Chairman Max Baucus, D-Mont.
In the House, Reps. Steve Israel, D-N.Y., and Tim Ryan, D-Ohio, introduced a bill that would that would tax at 100 percent bonuses above $100,000 paid by companies that have received federal bailout money.
"We will use any means necessary," said Ryan. "It boggles my mind how these executives can be so unaware of what the American people are going through."
The Internal Revenue Service currently withholds 25 percent from bonuses less than $1 million and 35 percent for bonuses more than $1 million.
As lawmakers stampeded to the microphones over the American International Group Inc. bonuses, the Obama administration said it was trying to put strict limits on how future government bailout dollars could be used. But sharp questions have been raised about what the administration knew about the bonuses - and when.
"Recipients of these bonuses will not be able to keep all of their money," declared Senate Majority Leader Harry Reid, in an unusually strong threat delivered on the Senate floor.
"If you don't return it on your own we will do it for you," said Chuck Schumer of New York.
The bonuses were paid legally, part of a program that had been disclosed in advance in filings that American International Group Inc. made with the government.
House and Senate Democrats were crafting separate bills to tax up to 100 percent of generous bonuses awarded by companies rescued by taxpayer money. Republicans said President Barack Obama's administration should have done more to stop the bonuses.
AIG would not be the only firm named by either Democratic bill, but there was no question whose executives inspired the legislation.
"They're not going to get the financial benefit of those bonuses," said Senate Finance Committee Chairman Max Baucus, D-Mont.
In the House, Reps. Steve Israel, D-N.Y., and Tim Ryan, D-Ohio, introduced a bill that would that would tax at 100 percent bonuses above $100,000 paid by companies that have received federal bailout money.
"We will use any means necessary," said Ryan. "It boggles my mind how these executives can be so unaware of what the American people are going through."
The Internal Revenue Service currently withholds 25 percent from bonuses less than $1 million and 35 percent for bonuses more than $1 million.
As lawmakers stampeded to the microphones over the American International Group Inc. bonuses, the Obama administration said it was trying to put strict limits on how future government bailout dollars could be used. But sharp questions have been raised about what the administration knew about the bonuses - and when.
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