"HOUSE PASSES BILL IMPOSING 90% SURTAX ON TARP BONUSES:
Today, by a vote of 328 to 93, the House approved legislation (H.R. 1586) that would impose a 90% excise tax on bonuses paid after December 31, 2008, by Fannie Mae, Freddie Man, and companies that have received over $5 billion in TARP funds. Six Democrats voted against the bill and 85 Republicans voted for the measure."
Which means that 243 Democrats voted for it and 87 republicans voted against it. LW
"The tax would also apply to bonuses paid by entities affiliated with these companies. Three-fourths of the TARP funds that have been spent went to companies that would be covered by this bill. This tax will not apply to any bonus that is returned to the company in the same taxable year that the bonus is paid. The bill would not affect taxpayers with adjusted gross income below $125,000 ($250,000 for joint filers) or employees of companies that have received $5 billion or less in TARP funds. When asked why the legislation doesn’t impose a 100% tax, the bill’s sponsor, House Ways and Means Committee Chairman Charles Rangel said, “We figured that the local and state governments would take care of the other 10 percent.”
Senate Finance Committee Chairman Max Baucus and ranking member Charles Grassley introduced their bill today. For companies that received TARP funds, the Baucus-Grassley bill would impose a 35 percent excise tax on both employers and employees, on retention bonuses and other bonuses. The proposal would also put a cap on the amount of income employees of these companies are allowed to defer tax free. Small banks as defined by the tax code and entities that received less than $100 million in TARP funds would be exempt from the legislation. It is unclear when Senate action may occur."
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