Banking Crisis

Democrat Lawmakers Propose 50 Per Cent Bonus Tax On Bailed Out Firms

Tom Burroughes Editor London 5 March 2010

Democrat Lawmakers Propose 50 Per Cent Bonus Tax On Bailed Out Firms

Democrat Party senators tried to introduce a 50 per cent US bonus tax yesterday on companies – most of them banks - that have received money from the government’s bailout program, media reports said.

Jim Webb, from Virginia, and Barbara Boxer, from California, proposed an amendment to a jobs bill that would levy the one-off tax on bonuses greater than $400,000 at companies that took more than $5 billion.

The proposal highlights how policymakers still believe that bonuses are a hot political issue. This is particularly the case at firms which have received taxpayers’ money, such as banks and the insurance giant AIG. But the matter even touches other, non-financial sectors, such as the automaker industry, in the wake of the government-backed rescue deal of General Motors.

“This is a carefully drafted, one-shot amendment to give American taxpayers an upside in the recovery of the financial system that they enabled,” said Mr Webb, according to a report by the Financial Times.

The US Chamber of Commerce has warned lawmakers they would count a vote in favour of the amendment as anti-business, the newspaper said.

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