In the wake of a fresh round of big-money bonuses, Senator Boxer and Senator Jim Webb came together today to introduce new legislation that would recoup billions by taxing these bonuses:
The Taxpayer Fairness Act would apply only to Wall Street firms and banks that received at least $5 billion from the 2008 Troubled Asset Relief Program (TARP). Specifically, it would impose a 50 percent excise tax on any 2009 bonuses paid to employees at those firms that received a salary greater than $400,000. The tax would apply to the portion of the bonus that exceeds that figure — which Boxer and Webb picked because it matches President Barack Obama’s salary. Employees’ base pay would be unaffected.
Discussing the new legislation, Senator Boxer said “To avert a financial collapse, taxpayers saved ‘too big to fail’ companies. It is outrageous that these companies are now doling out millions of dollars in bonuses while the rest of America feels the pain of their reckless decisions. The Taxpayer Fairness Act levies a 50 percent taxpayer fairness fee on bonuses in excess of $400,000 paid by firms that took $5 billion or more in TARP funds.”
“This is a pretty narrow bill,” Boxer added. “It’s symbolic but it’s also real. We estimate that we could see about $10 billion dollars into the treasury at the time when we’re talking about deficit reduction.”
As Politico also notes, “[c]ompanies whose executives could be affected by the legislation should it pass would be AIG, Bank of America, Citigroup, Goldman Sachs, Fannie Mae, Freddie Mac, General Motors and Goldman Sachs.” This is money that can do more good on Main Street creating jobs than it can rewarding the Wall Street leadership that in many cases was at the helm when we got into this mess in the first place.