Washington, D.C. – Congresswoman Carol Shea-Porter today voted in favor of legislation (HR.1586) that will hold companies, including American International Group (AIG), accountable for the excessive compensation packages that have been paid to executives on the American taxpayer’s dime. The legislation will tax these bonuses at a rate of 90 percent.
“It is outrageous that failed AIG executives are lining their pockets at the taxpayers’ expense,” said Congresswoman Shea-Porter. “I voted against TARP funding twice because it was clear that there was no oversight or accountability, and this is the result. The Wall Street executives who caused our financial crisis must be held accountable and this legislation will ensure that the bulk of the AIG bonuses are recovered immediately.”
- The bill would apply a separate income tax rate of 90 percent to bonuses received by individuals from companies which have received at least $5 billion from TARP. It would also apply to bonuses paid by Fannie Mae and Freddie Mac.
- For this purpose, bonuses will be defined as any retention payment, incentive payment, or other bonus which is in addition to regular employee compensation payable on a periodic basis.
- The special tax rate only would apply to individuals and families with overall income (including income other than bonuses) in excess of $250,000.
- The bill applies to payments received after December 31, 2008.
Congresswoman Shea-Porter has a strong record of standing up against excessive executive compensation. Last year, Shea-Porter voted twice against the Wall Street Bailout, stating “Wall Street executives will still be able to receive staggering salaries while struggling American taxpayers are paying for their mistakes.”