WASHINGTON, DC - The House of Representatives today gave overwhelming bipartisan support to H.R. 1586, legislation written by Ways and Means Committee Chairman Charles B. Rangel (D-NY), to tax the bonuses of highly paid individuals at a rate of 90 percent if their employer received more than $5 billion in Federal capital injections under the Troubled Asset Relief Program (TARP). The legislation passed the House by a vote of 328-93, drawing support from 85 Republican Members.
“This bill rights a wrong," said Ways and Means Committee Chairman Charles B. Rangel (D-NY). “Most Americans believe a bonus is paid for a job well done. The whole idea that a handful of people might receive bonuses at taxpayer expense for threatening our financial system and the very communities in which we live is simply repugnant. It is not our job to tell the private sector what to do, but it is our job to say you’re not rewarding greed at taxpayer expense.
“The buck stops here and this bill sends a clear signal -- a red light -- showing that this abuse must stop and the IRS will enforce the law," said Chairman Rangel. “We are not trying to punish anybody, but rewards should be subjective and you don’t reward greed with taxpayer money. I am so pleased this bill passed with overwhelming bipartisan support and I hope the Senate will follow suit."
The 90 percent income tax on bonuses contained in H.R. 1586 only applies to taxpayers with adjusted gross income over $250,000 per year. It affects bonuses received on or after Jan. 1, 2009. Any individual who received a bonus from a qualifying company who repays the bonus during the same tax year it was given would not be subject to the 90 percent rate.R. 1586 and here to view a brief summary of the legislation.
