Post by Tim Collins on Mar 17, 2009 9:43:35 GMT -7
Proposal #1 - 100% Tax Rate
New bill would tax AIG bonuses at 100 percent
www.newsday.com/news/local/politics/ny-usisra0318,0,5556900.story
BY JACK SIRICA | jack.sircia@newsday.com
11:41 AM EDT, March 17, 2009
The $165 million in bonuses set to go to American International Group executives would be taxed at 100 percent under a new bill introduced Tuesday in the House.
President Barack Obama is moving to block the AIG bonuses, but it's unclear whether he can get the payments back from the company, which is awaiting a $30-million installment in federal bailout money.
The sponsor of the new bill, Rep. Steve Israel (D-Huntington), said Tuesday that "if we can't kill the bonuses, we'll tax the bonuses.
"American families shouldn't be forced to reward these professional financial failures with extravagant bonuses that could buy fancy cars and yachts," Israel said in a statement. "AIG may not like it, but since they had to come to the federal government for help, the federal government now has a say in how they spend taxpayer money."
Manhattan-based AIG has said it had no choice but to pay the bonuses under agreements signed last year before it sought the bailout. The company was saved from insolvency by $170 in taxpayer-backed loans.
Currently, the IRS withholds 25 percent from bonuses of less than $1 million and 35 percent for bonuses that are greater. Israel said his proposal would tax bonuses of more than $100,000 disbursed to employees of companies receiving funds from the government's Troubled Asset Relief Program. Bonuses would be taxed beginning with those disbursed this year.
Proposal #2 - 60% Tax Rate
www.reuters.com/article/ousiv/idUSTRE52G4B320090317
House bill would slap surtax on AIG bonuses
Tue Mar 17, 2009 11:41am EDT
WASHINGTON (Reuters) - A Democratic U.S. congressman said on Tuesday he has introduced a bill that would slap a 60 percent surtax on large bonuses to be paid to executives at bailed-out insurer American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz).
Michigan Democratic Rep. Gary Peters introduced the bill and has picked up five co-sponsors. He said in a statement that the bill would "create a 60 percent surtax on bonuses over $10,000 to any company in which the U.S. government has a 79 percent or greater equity stake in the company. Currently, AIG is the only company that meets this threshold."
(Reporting by Kevin Drawbaugh; Editing by Leslie Adler)