Following extraordinary abuses of the public trust by companies that awarded exorbitant bonuses while receiving billions in taxpayer help, the House of Representatives today passed the Bonus Recoupment Tax Bill (HR 1586), legislation to recover taxpayer dollars by imposing a new 90 percent income tax on bonuses awarded by companies such as AIG that have received over $5 billion from the financial rescue package (TARP). The bill passed by a margin of 328 – 93, and must pass the Senate before it could be signed into law.

“American taxpayers should not foot the bill to pay huge bonuses to the same people whose greed and recklessness helped create the financial crisis,” said U.S. Representative Rick Larsen (WA-02) after voting for the legislation. “My constituents are hurting in this recession and making sacrifices every day.   They demand fairness and they deserve to know that their money is being spent in the public interest and not for private gain.”

The tax applies to retention payments, incentive payments and other bonuses that were awarded after December 31, 2008 and received by individuals with adjusted gross income over $250,000. It does not apply to any bonus returned to a company in the same taxable year.

“Moving forward, we must put in place appropriate regulations for our financial markets so we never face a crisis like this one again.”

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