Rep. McDermott Cosponsors Bill To Tax Wall Street Bonuses
Press Release
Today, Rep. Jim McDermott (D-WA) announced he was cosponsoring legislation that would tax excessive bonuses of executives at Wall Street firms that received Troubled Asset Relief Program (TARP) funds last year. The Wall Street Bonus Tax Act would place a 50 percent tax on bonuses of $50,000 or more, the revenue from which would be directed to a lending program for small businesses.
"This is about economic justice," Rep. McDermott said. "Americans are furious and have every reason to be. Unemployment is at 10 percent, more than 2 million homes were lost last year, and there are 6 unemployed people for every available job. Yet CEO pay at a Wall Street firm is about 300 times that of the average worker. It's time that executives understood that the bailout money we gave them was intended to stabilize the economy--not line their pockets. If after the last year, Wall Street still wasn't able to find a conscience, we are more than happy to help them."
Rep. Peter Welch (D-VT), who introduced the bill, said, "Fifteen months after the American taxpayer threw Wall Street a life preserver, its biggest firms are about to break their own records of lavish, excessive and unearned bonuses. Paid for by hardworking Americans who continue to struggle through tough economic times, these bonuses are Exhibit A that Wall Street has not learned its lesson. When you see a bank being robbed, you try to stop it. My bill will put an end to this breathtaking heist."
The legislation would place the tax on all bonus compensation in excess of $50,000, including cash and stock. The revenue would then go to a temporary lending program administered by the Small Business Administration to help small businesses secure loans. Recent reports indicate that small business lending by banks receiving TARP funds has been significantly scaled back over the last year.
According to a recent New York Times article, five of the largest banks to get help from the federal government last year--Citigroup, Bank of America, Goldman Sachs, JPMorgan Chase, and Morgan Stanley--have together set aside $90 billion for compensation.
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