Tags: Boxer | Webb | Bonus | Tax | Bailed-Out | Firms

Boxer, Webb Want Bonus Tax at Bailed-Out Firms

Friday, 05 Feb 2010 08:40 AM

 

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Two Democratic senators on Thursday proposed legislation that would impose a one-time tax on bonuses paid to executives of companies bailed out with taxpayer money.

Senators Barbara Boxer and Jim Webb proposed a 50 percent tax on 2009 bonuses above $400,000 at any firm that has received more than $5 billion in government assistance.

The senators said they had not yet gathered broad support for the proposal, and neither sits on the tax-writing Senate Finance Committee, which would likely have to take up the bill. A 35 percent tax on bonuses at bailed-out companies was proposed last year by the leaders of the Finance Committee, Democrat Max Baucus and Republican Charles Grassley, but it has not been acted on.

The Boxer-Webb proposal comes amid rising anger in the United States and abroad over lavish bonuses paid to executives at large financial firms so soon after governments had to use taxpayer money to rescue the financial system from collapse.

"We don't believe it's class warfare," Boxer, a Democrat facing a tough re-election fight this year, said of the proposed legislation. "We think it's eminently fair."

Webb said the idea gained favor with him after a Financial Times editorial supported a similar idea.

The British government has already announced a 50 percent levy on large bonuses at banks. On Wednesday, France's lower house of parliament passed a bank bonus tax amendment.

U.S. lawmakers have been slower to move on taxing bonuses. President Barack Obama instead has proposed a fee on the largest financial companies to recoup expected taxpayer losses associated with the bailouts.

The fee, which Obama proposed late last month, would collect about $90 billion over 10 years.

© 2014 Thomson/Reuters. All rights reserved.

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