/PRNewswire-USNewswire/ -- Speaker Nancy Pelosi issued the following statement tonight on legislation the House will vote on tomorrow to hold companies, including American International Group (AIG), accountable for the bonuses that were paid to their executives. The legislation will recover the bulk of these bonuses by taxing them at a rate of 90 percent. Below the Speaker's statement is a brief fact sheet on HR 1586.
"We must stabilize the financial system in order to strengthen our economy and create jobs. We must also protect the American taxpayer from executives who would use their companies' second chances as opportunities for private gain.
"Because they could not use sound judgment in the use of taxpayer funds, these AIG executives will pay the Treasury in the form of this tax. I urge all my colleagues to vote in favor of this legislation and in favor of recovering taxpayer dollars and protecting Americans from the continued poor judgment of some of America's largest companies."
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As a result of extraordinary abuses of the public trust by companies rewarding employees with excessive compensation while receiving billions in taxpayer assistance, Congress introduced legislation to recover taxpayers' dollars.
The bill would apply a separate income tax rate of 90 percent to bonuses received by individuals from companies which have received at least $5 billion from TARP. It would also apply to bonuses paid by Fannie Mae and Freddie Mac.
For this purpose, bonuses will be defined as any retention payment, incentive payment, or other bonus which is in addition to regular employee compensation payable on a periodic basis.
The special tax rate only would apply to individuals and families with overall income (including income other than bonuses) in excess of $250,000.
The bill applies to payments received after December 31, 2008.
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