Million-Dollar-A-Month Salaries Go Unscathed
Statement of Congressman Brad Sherman Regarding Bill Taxing Excess Bonuses
The tax bill coming before the House of Representatives today is a step in the right direction. It imposes a 90% tax on bonuses paid to executives of the big bailed-out financial institutions.
While the bill focuses on bonuses, it does not affect million-dollar-a-month salaries. In fact, a bailed-out bank which might otherwise pay an outrageous bonus, is free to raise an executive's salary to $2 million a month. Not a penny of that $2 million a month would be taxed or restricted by this bill.
The bill also allows unlimited commissions, without defining the word commissions. If Wall Street firms can rename their "bonuses" and call them "commissions," they may escape the bill entirely.
The bill applies to those financial institutions that have received over $5 billion in return for their preferred stock. The Treasury is now planning to spend hundreds of billions of dollars buying toxic assets from financial institutions. A financial institution's executives are not affected by the bill merely because the institution sells tens of billions of dollars of toxic assets to the Treasury.
I will be introducing a bill either Friday or Monday which imposes a substantial tax on all excess compensation (over $500,000) paid to executives of all the big bailed-out firms. It will deal with salaries, bonuses, retention payments, commissions, employee-of-the-week prizes, and all other manners of compensation.