US House moves to tax AIG bonuses

The US House of Representatives has passed a bill that will impose a 90 per cent tax on bonuses paid to employees of companies that have received a government bailout.Thursday's move followed widespread public anger over a decision by insurance giant American International Group (AIG) to pay $165m in bonuses to financial executives after taking more than $170bn in taxpayer bailout money to keep the company afloat. Congress and Barack Obama's administration have scrambled to contain and even harness the fallout from the payout, with the House denouncing it as a "squandering of the people's money" and the US president saying the congressional bill "rightly reflects the outrage that so many feel over the lavish bonuses". Similar legislation has been introduced in the senate, with Obama signalling support for the move. "I look forward to receiving a final product that will serve as a strong signal to the executives who run these firms that such compensation will not be tolerated," the president said in a statement. The bill would impose a 90 per cent tax on bonuses given to employees - with family incomes above $250,000 – of companies that have received at least $5bn in government bailout money. It would apply to such bonuses issued since last December 31. In some cases, the bonuses may be taxed 100 per cent, leaving recipients with nothing. Charles Rangel, the Democratic chairman of the tax-writing House Ways and Means Committee, said he expected local and state governments to take the remaining 10 per cent of the bonuses.