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Democratic lawmakers introduced a bill Thursday that would slap a 50-percent tax on "excessive" bonuses paid to employees of bailed-out Wall Street banks and investment firms.
"It is outrageous that these companies are now doling out millions of dollars in bonuses while the rest of America feels the pain of their reckless decisions," said Senator Barbara Boxer, who co-sponsored the measure with Senator Jim Webb.
The bill targets bonuses paid out by banks and other financial institutions rescued from collapse with funds from the US government's Troubled Asset Relief Program (TARP).
It would slap a 50-percent tax on bonuses paid out last year in excess of 400,000 dollars -- a figure chosen because it matches President Barack Obama's annual paycheck.
"This legislation is a targeted, reasonable approach to bring fairness and equity into the process -- as it was intended," said Webb.
The bill would apply only to bonuses earned in 2009, a year in which Wall Street companies teetered on the edge of survival and leaned heavily on federal assistance.
Many critics say big-bonus culture may encourage the type of risky activities that triggered the global financial crisis.
But Webb insisted the tax is not a broader backlash against wealthy Americans as the country digs out from a crippling recession.
"This is not class warfare," Webb said, stressing the legislation's limited time frame.
The proposed legislation followed revelations Wednesday that insurance giant American International Group is to pay 100 million dollars in employee bonuses this year, after similar payments by the bailed-out insurance giant last year ignited a political firestorm.
AIG said it would make the payouts under a deal in which employees agreed to accept less than they were owed in exchange for early payment.
Obama was "frustrated and angry" about the huge payouts, according to a spokesman, while the US government's pay czar in charge of compensation at bailed-out companies called the payments an "outrage" that were nonetheless legally binding.
AIG neared collapse in September 2008 when it was unable to meet its obligations for contracts written to insure mortgage securities and related assets.
The US Federal Reserve Bank, fearing that AIG's default could lead to the collapse of the entire global financial system, provided a loan of some 85 billion dollars to the insurance giant in September 2008.
The payout was the first portion of a staggering bailout that ultimately totaled some 180 billion dollars -- a sizeable portion of which came from TARP.
