Taxing The Bonuses: An Update

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Congress is trying to figure out if they have the authority to somehow block the AIG derivative traders from receiving their bonus money; some sort of legislative activity is expected this week. So far, the Democratic leadership has yet to sign on to Rep. Gary Peters's bill, which would levy a 60% surtax on bonuses over $10,000 for any company in which the government owns more than 79%. The thinking here is that only AIG meets that threshold, and that the 60% surtax, when added to the 35% income tax rate for the traders, would reduce the effective bonus to near zero. State and local taxes would account for the rest. Peters is a member of the House Financial Services Committee. Other options on the table include an unspecified "authorization" to the Attorney General to recover excess compensation. 

 

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Atlantic contributing editor Marc Ambinder is co-writing a book on national security and secrecy. More


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