The House Committee on Ways and Means has announced that Rep. Charles B. Rangel (D-NY) has introduced legislation to tax executive bonuses. The legislation, if passed, would affect bonuses received after January 1, 2009. You can read the text of the bill here as a pdf.
The legislation, which has been introduced as H.R. 1586 imposes a tax of 90% on bonuses of “highly paid individuals” (meaning those with AGI of $250,000 or more) for employees of companies which have received $5 billion or more under TARP. Hmm… Who could that be? Thinking… Thinking…
Could it be AIG? And Bank of America?
Interestingly, as Congress ramps up the restrictions on TARP money, more and more banks are miraculously finding that they really don’t need the money after all. In recent weeks, banks such as Sun Bancorp, Inc., the parent company of Sun National Bank, have indicated that the program is more trouble than it’s worth; Sun says it will return the $89 million of TARP funds that it has received. Makes you wonder why they took it in the first place.
Other banks, like Wells Fargo, are already whining about the “cost” to the banks. Wells Fargo cut its dividend pay out in order to repay TARP money. Wells’ CEO, Jeff Stumpf, has said, “These actions will help us repay the government’s investment at the earliest practical date. The U.S. Treasury’s Capital Purchase Program investment is generating a return for the U.S. taxpayer — at significant cost to the company.” Um, but that’s what lenders do, right, Mr. Stumpf? They make money on loans. I guess it doesn’t feel so good in the other direction.
Meanwhile, smaller community banks are making very public the notion that they have not accepted TARP funds. Some of those banks include Auburn National Bancorporation, Inc., United Bancorp and Pennsylvania’s own Harleysville Savings Financial Corp.
The field keeps changing on this one day by day. Stay tuned!Want more taxgirl goodness? Pick your poison: You can receive posts by email, follow me on twitter (@taxgirl) hang out with me on Facebook and check out my YouTube channel.